Henri Macon is a Juice merchant trading from a single shop. Here is his trial balance as at 30

September 2019.

Trial balance for Henri Macon as at 30 September 2019

Debit Credit

Capital 38,600

Drawings 32,000

Bank loan 100,000

Cash at bank 70,600

Equipment at cost 10,000

Accumulated depreciation- Equipment 4,750

Fixtures at cost 70,000

Accumulated depreciation- Fixtures 33,250

Receivables 186,000

Allowance for receivables 4,000

Payables 210,000

Inventory (as at 1 October 2018) 72,000

Sales 744,000

Purchases 640,000

Insurance 3,600

Rent 20,000

Loan interest 15,000

Miscellaneous expenses 15,400

Total 1,134,600 1,134,600

Additional information is provided for use in preparing the companys adjustments:

1. The value of closing inventory is 136,000.

2. There is an accrual for rent of 4,000.

3. There is a prepayment of insurance of 400.

4. Office equipment has a useful life of four years and a residual value of 500. It is to be depreciated on a straight-line basis.

5. Fixtures are to be depreciated on the reducing balance basis at a rate of 20 per cent.

6. The Majestic Hotel is one of Henri's best customers. It has just been declared bankrupt. The hotel owes Henri 26,000.

7. The allowance for receivables is to be set at ten per cent of outstanding receivables as at 30 September 2019.

Required:

1. Make the end-of-period adjustments entries (10.8 Marks)

2. Prepare Henri's income statement for the year ended September 30, 2019. (9.2 Marks)

3. Prepare Henri's balance sheet as at September 30, 2019. (10 Marks)