Leontyne Strauss is a retailer who had not kept a full set of accounting records. The following is a summary of the bank transactions in her cash book for the year ended December 31, 2014. Receipts $ Payments $ Debtors 1,384,500 Trade Creditors 745,540 Cash Sales 950,080 Rent 312,000 Loan 300,000 Electricity 40,720 Loan Principal 100,000 Water 13,780 Salary 613,600 Accounting Fee (2013) 32,000 Telephone 23,080 Computer Equipment 300,000 Drawings 4,000 Cash purchases 301,440 2,634,580 2,486,160 You are given the following information 1 Favourable bank balance per cash book on January 1, 2014 amounting to $106,920 2 During the financial year discounts allowed by trade creditors amounted to $440 and those allowed to trade debtors $800. 2 3 During the financial year goods returned by trade debtors amounted to $1,600 and goods returned to trade creditors amounted to $6,900. 4 During the financial year a trade debt of $1,200 owed by Regina Mountbatten was set off against the $2,000 owing to the same Regina Mountbatten a trade creditor. 5 Michelle Sutton, a cash sales customer returned goods during the financial year amounting to $700. Michelle Sutton was repaid her $700 from the daily cash sales. 6 Leontyne Strauss grants a credit period of 30 days to trade debtors. The closing trade debtors balance includes a debt of $800 from Miriam Sonnet. The goods were sold to Miriam in November 2013. Miriam went to the United Kingdom for a two (2) week vacation in February 2014. On December 31,2014 Miriam was still in the United Kingdom. 7 The amount of cash received from cash sales were all paid into the bank with the exception of: $2,800 Plumbing repairs $4,000 Donation to community Christmas party 8 Leontyne Strauss keeps a cash float of $10,000 for change in his retail outlet. 9 Leontyne Strauss agreed to pay her daughter, Nahili,, a commission of 5% of the net profit after charging such commission, for working in the retail outlet on Sundays. (Round to the nearest dollar) 10 The computer equipment was purchased on April 9, 2014. Depreciation should be calculated on the computer equipment on the straight line basis at a rate of 20% per annum on cost. It is the policy of the business to charge a full months depreciation in the month of acquisition or disposal. 11 The accounting fee for preparing the 2014 financial statements is estimated at $35,200. 12 On April 1, 2014 Leontyne received a loan of $300,000 from her mother Anastasia Mozart. Interest should be charged on the reducing balance at a rate of 10% per annum. The first interest payment is to be made on March 31, 2015. The principal is being paid in equal instalments of $100,000 on September 30, 2014, September 30, 2015 and September 30, 2016. 13 December 31,2013 December 31, 2014 $ $ Stock 138,400 77,300 Furniture (at cost) 100,000 100,000 Allowance for depreciation furniture 30,000 40,000 Trade debtors 6,900 2,360 Trade creditors 1,420 5,200 Rent paid in advance - 24,000 Accrued electricity 3,500 3,660 3 Required: (a) Prepare the Trade Debtors Control Account (3 marks) (b) Prepare the Trade Creditors Control Account (3 marks) (c) Prepare the Statement of Affairs as at December 31, 2013 (6 marks) (d) Prepare the Income Statement for the year ended December 31, 2014 (11 marks) (e) Prepare the Balance Sheet as at December 31, 2014

Required: (a) Prepare the Trade Debtors Control Account (3 marks) (b) Prepare the Trade Creditors Control Account (3 marks) (c) Prepare the Statement of Affairs as at December 31, 2013 (6 marks) (d) Prepare the Income Statement for the year ended December 31, 2014 (11 marks) (e) Prepare the Balance Sheet as at December 31, 2014 (17 marks) Section B Do Question 2 or Question 3 Question 2 Black Shore Limited Balance 5 heets as at December 31, 2013 and December 31, 2014 and the profit and loss accounts for the years ended December 31, 2013 and December 31,2014 are as follows Required: (a) Prepare the Trade Debtors Control Account (3 marks) (b) Prepare the Trade Creditors Control Account (3 marks) (c) Prepare the Statement of Affairs as at December 31, 2013 (6 marks) (d) Prepare the Income Statement for the year ended December 31, 2014 (11 marks) (e) Prepare the Balance Sheet as at December 31, 2014 (17 marks) Section B Do Question 2 or Question 3 Question 2 Black Shore Limited Balance 5 heets as at December 31, 2013 and December 31, 2014 and the profit and loss accounts for the years ended December 31, 2013 and December 31,2014 are as follows