Question
Debit Credit $ $ Purchases and sales 1,250,500 2,870,000 Capital 450,000 Inventory at January 1, 2020 235,000 Returns 42,200 22,500 Wages 340,500 Rent 80,000 Rates
| Debit | Credit |
| $ | $ |
Purchases and sales | 1,250,500 | 2,870,000 |
Capital |
| 450,000 |
Inventory at January 1, 2020 | 235,000 |
|
Returns | 42,200 | 22,500 |
Wages | 340,500 |
|
Rent | 80,000 |
|
Rates | 15,500 |
|
Motor vehicle | 800,000 |
|
Provision for depreciation motor vehicle |
| 120,000 |
Equipment | 950,000 |
|
Provision for depreciation equipment |
| 95,000 |
Fixtures & fittings | 150,000 |
|
Provision for depreciation fixtures & fittings |
| 5,000 |
Drawings | 8,000 |
|
Long-term loan |
| 600,000 |
Trade receivables & payables | 35,000 | 94,000 |
Provision for bad debts |
| 1,500 |
Commission received |
| 6,000 |
Carriage outwards | 12,000 |
|
Carriage inwards | 2,500 |
|
Rent received (from G. Lascelles) |
| 30,000 |
Bank | 347,300 |
|
Cash | 25,500 |
|
| 4,294,000 | 4,294,000 |
Additional information:
a) Inventory as at December 31, 2020 was $35,300
b) Depreciate Equipment at 10% and motor vehicle at 15% on their balances and fixtures & Fittings at 10% on the cost.
c) Wages was owed for $12,000.
d) Rates prepaid were $3,000.
e) Commission received was owed $4,000.
f) On August 1, 2020, Kenrick sublet a section of the premises to G. Lascelles at $15,000 per month.
g) The provision for bad debts is to be revised to 10 % of trade receivables.
Required:
1. Prepare the Income Statement for the year ended 31 December 2020 and, (30 Marks)
2. Prepare a Statement of Financial Position as at 31 December 2020. (20 Marks )
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