Kingston’s Best was launched on 1 July 2015 (no opening inventory).

Use the trial

balance and the additional information provided to complete the income statement and
statement of financial position, making the necessary adjustments for inventory, accruals
and prepayments.

Kingston’s Best
Trial balance at 30 June 2016
£ £
Sales revenue 38,500
Purchases 29,000
Vehicles (at cost) 5,000
Trade receivables 6,800
Trade payables 9,100
Bank 15,100
Cash 350
Rent and rates 2,400
Lighting and heating 1,500
Drawings 7,000
General expenses 600
Other income 150
Equity (at start of year) _____ 20,000
67,750 67,750

The following additional information at 30 June 2016 is also provided:

 Inventory at 30th June 2016: £10,000

 Accrued lighting and heating: £300
 Accrued general expenses: £50
 Prepaid rent and rates: £240

Required

(a) Prepare an income statement for Kingston’s Best for the year ended 30th
June 2016.

(b) Prepare a statement of financial position for Kingston’s Best as at 30th

June 2016.