Bugs Bunny a wholesale dealer in ready made menswear

achieves a #8229
Bugs Bunny, a wholesale dealer in ready-made menswear, achieves a gross profit ratio of 50
per cent. The statement of financial position of the business as at 30 June 20X2 was as
follows:Since this date the accounting function has been neglected. However, on the basis of
records in his personal diary, Bugs Bunny confirms the following:1. As at 30 June 20X3,
£138,000 is due from credit customers and £108,000 is owed to credit suppliers.2. During the
year ended 30 June 20X3, the payments set out below have been
made:....................................................... £Paid for purchases ............................. 252,000Staff
salaries ..................................... 80,130Rent for shop premises .........................
10,000Entertainment ..................................... 2,250Office equipment ...............................
15,200Motor vehicles .............................. 17,500Other expenses ..............................
33,020Personal expenses ........................... 13,2503. A vehicle acquired for £15,000 on 1 April
20W9 was sold for £3,830 in the year to 30 June 20X2. Motor vehicles and equipment are
depreciated at 20 per cent and 10 per cent per annum on cost, respectively. The depreciation
policy is to charge a full year's depreciation in the year of acquisition and none in the year of
disposal.4. A provision for doubtful debts is maintained at 5 per cent of trade receivables
outstanding at the year end. Debts amounting to £22,000 were written off in the year.5. Accruals
as at 30 June 20X3 consisted of salaries £10,200, rent £3,000 and other expenses amounting
to £13,000.6. Cash in hand and at bank on 30 June 20X3 is £400.7. Inventories in trade on 30
June 20X3 (valued at cost) is £99,405.8. With Bugs Bunny's permission, his teenage sons have
been regularly helping themselves to ready-made garments from the shop.9. All sales and
purchases are on credit.RequiredPrepare the statement of profit and loss for Bugs Bunny for
the year ended 30 June 20X3 and the statement of financial position as at that date?View
Solution:
Bugs Bunny a wholesale dealer in ready made menswear achieves a

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