RK Oil Plc is a supplier of oil and lubricant products to the automobile and manufacturing industries. You are the financial controller and in charge to oversee the smooth running of the financial accounting functions. Below is the one month trial balance hurriedly extracted to help with this exercise.
RK Oil Plc,
Trial Balance for 1 month 31st January, 2017.
Office Equipment 104,500
Retained Profit 7,550
Director remuneration 40,000
Wages & Salary 10,000
Printing Postages & Stationary 3,400
Balance 239,550 239,550
Note A. Telephone expenses of £115 need to be accrued
B. Rent balance is prepaid for the year. The monthly rent is only £500
C. Depreciate the Equipment at 20% straight line
Extract the Profit and loss account and Balance sheet. Explain the purpose of these two statements for managements.