Question

Hendry Ltd opened his new business on 1 January 2022. On that date, the only asset was a bank balance of £11,000. During the year, Hendry's drawings from the business totalled £36,000. On 31 December 2022, the assets and liabilities of the business were as follows: Computers and furniture £61,000; inventory of raw materials £17,500; finished goods, at cost £8,400; bank overdraft £12,600; trade payables £6,500; prepayments £2,500; trade receivables £5,500; the provision for bad debts £3,000; bank loan £40,000; interest payable £1,500; accrued expenses £3,600. What is the profit of the business in the year ended 31 December 2022?

          Hendry Ltd opened his new business on 1 January 2022. On that date, the only asset was a bank balance of 
£11,000. During the year, Hendry's drawings from the business totalled £36,000. On 31 December 2022, the
assets and liabilities of the business were as follows:
Computers and furniture £61,000; inventory of raw materials £17,500; finished goods, at cost £8,400; bank
overdraft £12,600; trade payables £6,500; prepayments £2,500; trade receivables £5,500; the provision for bad
debts £3,000; bank loan £40,000; interest payable £1,500; accrued expenses £3,600.
What is the profit of the business in the year ended 31 December 2022?

Hendry Ltd opened his new business on 1 January 2022. On that date, the only asset was a bank balance of
£11,000. During the year, Hendry's drawings from the business totalled £36,000. On 31 December 2022, the
assets and liabilities of the business were as follows:
Computers and furniture £61,000; inventory of raw materials £17,500; finished goods, at cost £8,400; bank
overdraft £12,600; trade payables £6,500; prepayments £2,500; trade receivables £5,500; the provision for bad
debts £3,000; bank loan £40,000; interest payable £1,500; accrued expenses £3,600.
What is the profit of the business in the year ended 31 December 2022?

Added by Jasmin C.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Akash M

07/02/2023

Step 1

The total assets can be calculated by adding up the value of computers and furniture, inventory of raw materials, finished goods, and trade receivables. Total assets = Computers and furniture + Inventory of raw materials + Finished goods + Trade receivables Total Show more…

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Hendry Ltd opened its new business on 1 January 2022. On that date, the only asset was a bank balance of £11,000. During the year, Hendry's drawings from the business totaled £36,000. On 31 December 2022, the assets and liabilities of the business were as follows: Computers and furniture £61,000; inventory of raw materials £17,500; finished goods, at cost £8,400; bank overdraft £12,600; trade payables £6,500; prepayments £2,500; trade receivables £5,500; the provision for bad debts £3,000; bank loan £40,000; interest payable £1,500; accrued expenses £3,600. What is the profit of the business in the year ended 31 December 2022? Hendry Ltd opened its new business on 1 January 2022. On that date, the only asset was a bank balance of £11,000. During the year, Hendry's drawings from the business totaled £36,000. On 31 December 2022, the assets and liabilities of the business were as follows: Computers and furniture £61,000; inventory of raw materials £17,500; finished goods, at cost £8,400; bank overdraft £12,600; trade payables £6,500; prepayments £2,500; trade receivables £5,500; the provision for bad debts £3,000; bank loan £40,000; interest payable £1,500; accrued expenses £3,600. What is the profit of the business in the year ended 31 December 2022?