10:11 M DFS MOCK.do... The University of Lahore (School of Accountancy & Finance) Drafting Financial statements MOCK TEST BS May 3, 2021 30 marks - 1 hours Q-1 Question 1: The following information relates to the business of Mana for the year ended 31 December 2011 $ Capital account, 1 January 2011 13,640 Freehold properties at cost 7,500 Furniture and fittings at cost 2.000 Motor cars at cost 6.300 Accumulated depreciation to 1 January Freehold properties 450 Furniture and fittings 800 Motor cars 2,370 Inventory 1 January 6.740 Purchases 54,520 Sales 79,060 Salaries 8.760 Rent 1,170 Office expenses 3,950 Motor expenses 3.790 Drawings 4.800 Allowance for receivables 1 January 600 Loan 4,000 Trade receivables 9,240 Trade payable 10,040 Bank balance 2.190 Total 110,960 110,960 You are also supplied with the following information: 1. Inventory at 31 December 2011 was $7,330. 2. Rent paid in advance at 31 December 2011 amounted to $250. 3. Allowance for trade receivables is to be made equal to 5% of accounts receivable at 31 December 2011 4. Depreciation is to be charged for the year at the following annual rates calculated on cost at the year end. Freehold properties 1% Furniture and fittings 10% Motor cars 20% 5. Interest on the loan at 5% per annum is to be provided. Requirement: Prepare an income statement for the year ended 31 December 2011 and a statement of financial position at that date. (20 marks) Question 2: A. A motor vehicle cost Rs 80,000 two years ago. It has been depreciated by the reducing balance method at 25% each year. It has now been disposed of for Rs.41,000. Disposal costs were Rs 200. Requirement: Calculate profit or loss on the disposal of of motor vehicle. (10 marks)