CK$\text{'}$S BALANCE SHEET AS AT$...($before adjustments$)$

Non Current Assets $($Fixed Assets$)$

CK$\text{'}$S INCOME STATEMENT for the year ended...$($before

adjustments$)$

Sales

$557,500$

Opening Stock $50,000$

$+$ purchases $\frac{420,000}{470,000}$

$-$ closing stock $42,{000}_{?}$

GROSS PROFIT

$\frac{428,000}{129\mathrm{.}500}$

Less Overheads $($Expenses$)$

You are required to make the following adjustments to the Income Statement and

Balance Sheet above:$-$

$($a$)$ closing stock was revalued at $38,000$

$($b$)$ bad debts of $500$ to be written off

$($c$)$ provision for bad debts to be set up at $15\%$ of the value of debtors after

the bad debts have been written off

$($d$)$ depreciate premises by $6\%$ using the straight line method

$($c$)$ depreciate shop fittings by $15\%$ using the straight line method $(3$ marks$)$

$($f$)$ travel expenses of $f400$ has been received which relate to expenses in the

last accounting period

$($g$)$ rent of $500$ has been prepaid which relates to the next accounting period.

$(2$ marks$)$

$($h$)$ Adjust the Income Statement and Balance Sheet on the handout given,

and explain the overall impact of adjustments $($a$)$ to $($g$)$ on the statements