Asim has an advertising agency. His financial year ends on 31 January.
He provided the following information on 31 January 2018.
Capital at 1 February 2017 120 000 $
Drawings 8 500
Office equipment at valuation at 1 February 2017 6 180
Motor vehicle at cost 15 000
Provision for depreciation of motor vehicle 5 400
Fees received from clients 28 350
Wages of assistant 19 000
General expenses 1 358
Motor expenses 970
Rates and insurance 2 280
Rent received from tenant 5 600
Additional information
1 At 31 January 2018
$2400 was outstanding from clients for fees.
Motor expenses outstanding amounted to $110.
A provision for doubtful debts of 2% of the amount owed by clients should be created.
2 The rates and insurance paid were for a period of 15 months from 1 February 2017.
3 Part of the premises were let to a tenant on 1 February 2017 at an annual rent of $4800.
4 One quarter of the motor expenses are for Asim’s personal use of the motor vehicle.
5 The motor vehicle is to be depreciated at 20% per annum using the reducing (diminishing) balance method.
6 The office equipment was valued at $5500 on 31 January 2018.
No office equipment was purchased or sold during the year.
REQUIRED
Prepare Asim’s income statement for the year ended 31 January 2018.
Asim
Income Statement for the year ended 31 January 2018
Asim
Income Statement for the year ended 31 January 2018