EXERCISE 2:

You are given the following trial balance as at 30 September 2019 of Emerson Trading: Dr (RM) Cr (RM) Capital at 1 October 2018 100, 000 Drawings 22, 000 Bank loan 40,000 Premises 150,000 Office equipment 12, 000 Furniture and fittings 18,000 Cash at bank 5, 700 Cash in hand 1,000 Inventories 1 October 2018 42,000 Accounts receivable and payable 32, 500 15, 200 Sales and purchases 96, 200 248, 000 Returns inwards and outwards 1, 200 800 Provision for depreciation - office equipment 4, 200 Provision for depreciation - fixtures and fittings 6, 500 Bad debts 2, 400 Allowance for doubtful debts 1 October 2018 800 Discount allowed 1, 250 Carriage inwards 8, 450 Salesmen's commission 9, 500 Salaries and wages 24, 800 Insurance 2, 400 Commission received 4, 500 Rent received 18, 000 Lighting charges 3, 800 Telephone and postage charges 4, 800 438, 000 438, 000 Notes: (a) Depreciation is to be charged as follows: Furniture and fittings 10% per annum on book value. Office equipment 20% per annum on cost. (b) An additional bad debt of RM3, 200 is to be written off. (c) Allowance for doubtful debts is to be made at 3% of accounts receivable. (d) Accrued interest at 30 September 2019 is RM3, 600. (e) Commission received amounting to RM2, 500 in arrears. (f) Rent received included RM9,000 which was for 6 months to 31 December 2019. (g) Inventories at 30 September 2019 were valued at RM86,000. Required: Prepare a statement of profit and loss for the year ended 30 September 2019 and a statement of financial position at that date