The following is the draft statement of financial position of Chan Ya Wen, a sole trader, at 31 May 2014
Statement of Financial Position at 31 May 2014
$000
Assets
Non-current assets
Buildings at valuation 500
Equipment at net book value 240
Motor vehicles at net book value 400 1140
Current assets
Inventories 55
Trade receivables 34
Other receivables 4
Cash and cash equivalents 2
95
Total assets 1235
Capital and Liabilities
Opening capital 900
Add profit for the year 250
1150
Less drawing 75
Closing capital 1075
Non-current liabilities
Loan
|
100
|
Current liabilities Trade payables
|
52
|
Other payables
|
8
|
|
60
|
Total capital and liabilities
|
1235
|
Additional information
|
|
After preparation of the draft statement of financial position the following errors were discovered:
1 A purchase credit note received for $12000 had been completely omitted from the books.
2 Inventory at 31 May 2014, cost $6000, was found to be damaged. A customer has agreed to buy the goods for $2500. Delivery costs will be $250.
3 The loan was received on 1 December 2013. Loan interest of 4% per annum has not been paid.
During the year vehicle repairs of $2000 had been incorrectly debited to the motor vehicles account. Motor vehicles have been depreciated by 25% per annum on the year end value
4 On 1 May 2014 a motor vehicle with a net book value of $16 000 had been badly damaged in a collision. No entry has yet been made in the accounts for this. The insurance company has agreed to pay $13 000 in compensation. The trader will receive a further $1200 for the scrap value.
5 On 27 May 2014 a credit customer was declared bankrupt and it was decided to write off the
$8000 owing. No record in the accounts has yet been made.
REQUIRED
Prepare a statement to show the corrected profit for the year ended 31 May 2014