roza_04
Oct 14, 2007, 10:39 PM
In each of the following situations, discuss whether the item would be included in the income statement for the year to 31 December 20X1 and at what amount. The business is that of a builder and builders trader.
a) Sales of general building materials by the builder's trader to third parties amounted to $52000 of which $48000 was received in cash by 31 December 20X1 and the
remainder was received in January 20X2.
b) Three house conversions were started and completed during the year at a price of $48000 each.
c) One office conversion, which was 60 per cent complete at the end of 20X0, was completed in 20X1 at a price of $80000. Invoices on account amounting to $48000 had been sent out in 20X0.
d) The building materials sold to third parties during the year cost $28000, of which all but $2000 had been paid by December 20X1
e) The building materials used on the three houses referred to in item (b) had cost $36000 and had all been paid by December 20X1
f) Wages paid in respect of the houses mentioned in item (b) amounted to $40000 for the year.
g) The costs related to the office mentioned in item (c) were as follows:
Wages paid in 20X0 16000
Wages paid in 20X1 12000
Materials used in 20X0 16000
Materials used in 20X1 14000
h) The storeworkers wages in the yard amounted to $16000 for the year.
i) The owner, who worked full time in the business, paid himself a salary of $18000 and also withdrew $2000 cash from the business to pay a pressing personal debt
j) The motor expenses paid in the year were broken down as follows (assume the owner uses his car 80 per cent for business):
Annual Registration on 3 vans paid 600 1 April 20X1
Annual Insurance on vans paid 960 1 April 20X1
Repairs and petrol for vans 1200
Annual Registration on owners car paid 200 1 June 20X1
Annual Registration on owners wifes car paid 200 1 June 20X1
Annual Insurance on owners car paid 240 1 June 20X1
Annual Insurance on owners wife car paid 240 1 June 20X1
Repairs and petrol for the two cars (50% for each car) 1600
k)The following bills were also paid during the year:
Electricity (payable at end of each quarter) 108 1 February
90 1 May
90 1 August
120 1 November
Rent for one year to 1 April 20X2 800 1 April 19X1
TV Rental to 1 April 20X2 120 1 April 19X1
Thank you
a) Sales of general building materials by the builder's trader to third parties amounted to $52000 of which $48000 was received in cash by 31 December 20X1 and the
remainder was received in January 20X2.
b) Three house conversions were started and completed during the year at a price of $48000 each.
c) One office conversion, which was 60 per cent complete at the end of 20X0, was completed in 20X1 at a price of $80000. Invoices on account amounting to $48000 had been sent out in 20X0.
d) The building materials sold to third parties during the year cost $28000, of which all but $2000 had been paid by December 20X1
e) The building materials used on the three houses referred to in item (b) had cost $36000 and had all been paid by December 20X1
f) Wages paid in respect of the houses mentioned in item (b) amounted to $40000 for the year.
g) The costs related to the office mentioned in item (c) were as follows:
Wages paid in 20X0 16000
Wages paid in 20X1 12000
Materials used in 20X0 16000
Materials used in 20X1 14000
h) The storeworkers wages in the yard amounted to $16000 for the year.
i) The owner, who worked full time in the business, paid himself a salary of $18000 and also withdrew $2000 cash from the business to pay a pressing personal debt
j) The motor expenses paid in the year were broken down as follows (assume the owner uses his car 80 per cent for business):
Annual Registration on 3 vans paid 600 1 April 20X1
Annual Insurance on vans paid 960 1 April 20X1
Repairs and petrol for vans 1200
Annual Registration on owners car paid 200 1 June 20X1
Annual Registration on owners wifes car paid 200 1 June 20X1
Annual Insurance on owners car paid 240 1 June 20X1
Annual Insurance on owners wife car paid 240 1 June 20X1
Repairs and petrol for the two cars (50% for each car) 1600
k)The following bills were also paid during the year:
Electricity (payable at end of each quarter) 108 1 February
90 1 May
90 1 August
120 1 November
Rent for one year to 1 April 20X2 800 1 April 19X1
TV Rental to 1 April 20X2 120 1 April 19X1
Thank you