Kiangsu-Chekiang College (Shatin)

Life & Society, Form 3

Exam Revision Exercise 2

Topic 8: Income Statement and Statement of financial position

Name: _____________________________ Class: F.3 ____ ( ) Date: _______________

Below are the details of Ian's business:

$
Wages 250,000
Deposit interest revenue 25,000
Motor vans 400,000
Time deposit (2026) 250,000
Bank overdraft 190,872
Bank loan (2024 Jan) 20,000
Utility expenses 39,942
Inventory 12,000
Accounts receivable 67,890
Cash in hand 76,440
Capital as at 1 April 2022 450,000
Marketing expenses 167,000
Research & development expenses 35,600
Service income 567,800
Loan from Jer (2025) 45,200

Required: Prepare for Ian's business an income statement for the year ended 31 March 2023 and a
statement of financial position as at 31 March 2023.

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Answer
Ian
Income Statement for the year ended 31 March 2023
$ $
Service Income 567,800
Add Other Revenues:
Deposit interest revenue 25,000 25,000
592,800

Less Expenses:
Wages 250,000
Utility expenses 39,942
Marketing expenses 167,000
Research & development expenses 35,600 492,542
Net profit 100,258

Ian
Statement of financial position as at 31 March 2023
$ $ $
Non-current assets
Motor vans 400,000
Time deposit (2026) 250,000 650,000

Current assets
Inventory 12,000
Accounts receivable 67,890
Cash in hand 76,440 156,330
Total Assets 806,330

Financed by:
Capital
Balance as at 1 April 2022 450,000
Add Net profit for the year 100,258
550,258
Non-current liabilities
Loan from Jer (2025) 45,200

Current liabilities
Bank loan (2024 Jan) 20,000

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Bank overdraft 190,872

Total liabilities 256,072

Total capital and liabilities 806,330