Tx notes fa22 Final

June 2023 to March 2024 exams
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8. John 
For the past five years John has run a business importing electrical goods from the Far East which 
he then sells to wholesalers in the UK. His statement of profit or loss for the year ended 31 
December 2022 is as follows:
Notes
1
Rent received is in respect of a flat above John’s business premises that is rented out. John
estimates that a tenth of the rent and rates, and a seventh of the light and heat is in respect of 
this flat.
2 
Travelling and entertaining expenses:
3
Irrecoverable Debts:
£ 
£ 
Sales 
325,000
Cost of sales 
(172,500)
Gross profit
152,500
Rent received (Note 1) 
9,500
162,000 
Wages and salaries 
50,200 
Rent and rates (Note 1) 
12,900 
Light and heat (Note 1) 
5,250 
Depreciation of fixtures and fittings 
1,500 
Insurance 
3,550 
Travelling and entertaining (Note 2) 
10,750 
Irrecoverable debts (Note 3)
6,750 
Depreciation of vehicles 
7,500 
Motor car expenses (Note 4) 
4,500 
Sundry expenses (Note 5) 
750 
Legal and professional charges (Note 6) 
4,750 
Interest on bank overdraft 
1,500 
Van expenses 
9,300 
Telephone 
3,350 
Repairs and renewals (Note 7) 
3,500 
126,050 
Net profit 
35,950 
John’s business travelling expenses 
5,175 
Christmas presents for sta
ff
250 
Entertaining UK customers 
5,050
Gifts to customers that carry the business name:
Boxes of chocolate costing £5.00 each 
125 
Calendars costing £1.50 each 
150 
10,750 
Trading debts written o
ff
5,250 

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