[nonoo]

A businessman started his business 1/1/2009 by depositing 100000 in the bank account of the business . He purchased an inventory of goods valued at 45000 . The monthly rent is 1500 for use of space . The businessman recorded all this other cash transaction as follow :

Receipts :
Revenues ( sales ) 186900
Other revenues 3000
Total 189900

Payment :
Rent 19500
New furniture ( purchase January 1,2009 ) 8400
Goods for resale 41050
Wages 24000
Salaries 27500
Total 120450
In addition the business paid himself a salary of 1000 per week
The account found two outstanding bills ( not paid yet ) one for new car of 20000 and a 12000 invoice for an inventory of goods.
The furniture and car had estimated useful life of 3 years and 5 years respectively . The account took a physical inventory count and found that was 30800 . There is tax rate of 30 % on net income before tax.

Prepare income statement and balance sheet

[rocklion10]

What is drawing

[pready]

A drawing account is used when an owner withdraws money from the business for personal use.

Owners of a Sole Proprietorship does not receive a salary, so in order to pay him or herself they will make a withdrawal from the company.

A drawing account is a temporary account that will be closed at the end of an accounting period.