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From
the trial balance below:
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Identify each item using a letter:
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"g"
if the item is needed for gross profit
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"e" if the item
is an expense
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"ca" if the
item is an current asset
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"fa" if the
item is a fixed asset
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"cl" if the
item is a current liability
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"fl" if the
item is a fixed liability
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"c" if the item
affects capital
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"r" if the item
is a revenue
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"d"
if the item is calculated on prior to entry
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Then complete the income
statement.
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Use "ADD" for
"allowance for doubtful debts.
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"ADD
increase/decrease" in the income statement.
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"Less ADD" in
the balance sheet.
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Q1)
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ID
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Trial Balance (TB)
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DR
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CR
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Loan
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£25,000
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Opening Inventory
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£15,600
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Allowance for doubtful debts
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£2,500
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Premises
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£670,000
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Salaries
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£130,000
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Cash
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£7,800
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Accounts Receivable
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£15,400
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Loan Interest
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£1,750
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Purchases
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£45,600
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Capital
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£248,900
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Accounts Payable
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£9,800
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Returns
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£900
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£1,200
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Mortgage
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£350,000
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Commissions
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£1,450
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Bank
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£24,500
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Rent Received
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£16,200
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Drawings
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£3,400
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Carriage Out
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£2,400
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Rates
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£1,800
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Sales
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£350,000
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Bad Debts
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£900
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Vehicles
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£80,000
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Carriage In
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£2,100
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End of Year
Adjustments (EOYA):
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Closing Inventory
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£12,400
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Allowance for doubtful
debts rate is
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6%
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of debtors
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Income Statement
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£
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£
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EOYA
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Balance Sheet
|
£
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£
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£
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