Need the solution for the following exercise questions.
1) 28.8
2) 28.9
3) 28.10 A
4) 28.13
28.8 The following trial balance was extracted from the books of R Giggs at the close of business on 28 February 20X7. Dr Cr f E Purchases and sales 92,800 157,165 Cash at bank 4,100 Cash in hand 324 Capital account 1 March 20X6 11,400 Drawings 17, 100 Office furniture 2,900 Rent 3,400 Wages and salaries 31,400 Discounts 820 160 Debtors and creditors 12,316 5,245 Stock 1 March 20X6 4,120 Provision for doubtful debts 1 March 20X6 405 Delivery van 3,750 Van running costs 615 Bad debts written off 730 174,375 174,375 Notes: (a) Stock 28 February 20X7 f2,400. (b) Wages and salaries accrued at 28 February 20X7 6340. (c) Rent prepaid at 28 February 20X7 1230. ) Van running costs owing at 28 February 20X7 672. (e) Increase the provision for doubtful debts by 191. (f) Provide for depreciation as follows: Office furniture f380; Delivery van $1,250. Required: Draw up the trading and profit and loss account for the year ending 28 February 20X7 together with a balance sheet as on 28 February 20X7. 331Part 4 . Adjustments for financial statements 28.9 The trial balance for a small business at 31 August 20X8 is as follows: E Stock 1 September 20X7 8,200 Purchases and Sales 26,000 40,900 Rent 4,400 Business rates 1,600 Sundry expenses 340 Motor vehicle at cost 9,000 Debtors and creditors 1, 160 2,100 Bank 1,500 Provision for depreciation on motor vehicle 1,200 Capital at 1 September 20X7 19,700 Drawings 11,700 63,900 63,900 At 31 August 20X8 there was: . Stock valued at cost prices f9, 100 Accrued rent of f400 . Prepaid business rates of $300 The motor vehicle is to be depreciated at 20% of cost Required: 1 The adjustments to the ledger accounts for rent and business rates for the year to 31 August 20X8. 2 A trading profit and loss account for the year ending 31 August 20X8, together with a balance sheet as at that date. 28.10A J Wright, a sole trader, extracted the following trial balance from his books at the close of business on 31 March 20X9: Dr f CF Purchases and sales 61,420 127,245 Stock 1 April 20X8 7,940 Capital 1 April 20X8 25,200 Bank overdraft 2,490 Cash 140 Discounts 2,480 62 Returns inwards 3.486 Returns outwards 1,356 Carriage outwards 3,210 Rent and insurance 8,870 Provision for doubtful debts 630 Fixtures and fittings 1,900 Van 5,600 Debtors and creditors 12,418 11,400 Drawings 21,400 Wages and salaries 39,200 General office expenses 319 168,383 168,383 Notes: (a) Stock 31 March 20X9 16,805. (b) Wages and salaries accrued at 31 March 20X9 13,500; Office expenses owing f16. ( c ) Rent prepaid 31 March 20X9 1600. (d) Increase the provision for doubtful debts by f110 to $740. (e) Provide for depreciation as follows: Fixtures and fittings f190; Van f1,400. 332Chapter 28 . Accruals and prepayments and other adjustments for financial statements Required: Prepare the trading and profit and loss accounts for the year ended 31 March 20X9 together with a balance sheet as at that date. 28.11 This question also relates to extended trial balances (see Exhibit 28.2) From the following trial balance of John Brown, store owner, prepare a trading account and profit and loss account for the year ended 31 December 20X7, and a balance sheet as at that date, taking into consideration the adjustments shown below: Trial Balance as at 31 December 20X7 Dr Cr f Sales 400,000 Purchases 350,000 Sales returns 5,000 Purchases returns 6,200 Opening stock at 1 January 20X7 100,000 Provision for doubtful debts BOO Wages and salaries 30,000 Rates 6,000 Telephone 1,000 Shop fittings at cost 40,000 Van at cost 30,000 Debtors and creditors 9,800 7,000 Bad debts 200 Capital 179,000 Bank balance 3,000 Drawings 18,000 593,000 593,000 (/) Closing stock at 31 December 20X7 f120,000. (ii) Accrued wages f5,000 (iii) Rates prepaid f500. (iv) The provision for doubtful debts to be increased to 10 per cent of debtors. (v) Telephone account outstanding f220. (vi) Depreciate shop fittings at 10 per cent per annum, and van at 20 per cent per annum, on cost. 28.12A The following trial balance has been extracted from the ledger of Mr Yousef, a sole trader. Trial Balance as at 31 May 20X6 Dr f Cr f Sales 138,078 Purchases 82,350 Carriage 5,144 Drawings 7,800 Rent, rates and insurance 6,622 Postage and stationery 3,001 Advertising 1,330 Salaries and wages 26,420 Bad debts 877 333Part 4 . Adjustments for financial statements Provision for doubtful debts 130 Debtors 12, 120 Creditors 6,471 Cash in hand 177 Cash at bank 1,002 Stock as at 1 June 20X5 11,927 Equipment at cost 58,000 accumulated depreciation 19,000 Capital 53,091 216,770 216,770 The following additional information as at 31 May 20X6 is available: (a) Rent is accrued by f210. (b) Rates have been prepaid by $880. (c) 12,211 of carriage represents carriage inwards on purchases. (d) Equipment is to be depreciated at 15% per annum using the straight line method. (e) The provision for doubtful debts to be increased by $40. (f) Stock at the close of business has been valued at f13,551. Required: Prepare a trading and profit and loss account for the year ended 31 May 20X6 and a balance sheet as at that date. (Association of Accounting Technicians) 28.13 Mr Chai has been trading for some years as a wine merchant. The following list of balances has been extracted from his ledger as at 30 April 20X7, the end of his most recent financial year. Capital 83,887 Sales 259,870 Trade creditors 19,840 Returns out 13,407 Provision for doubtful debts 512 Discounts allowed 2,306 Discounts received 1,750 Purchases 135,680 Returns inwards 5,624 Carriage outwards 4,562 Drawings 18,440 Carriage inwards 11,830 Rent, rates and insurance 25,973 Heating and lighting 11,010 Postage, stationery and telephone 2,410 Advertising 5,980 Salaries and wages 38,521 Bad debts 2,008 Cash in hand 534 Cash at bank 4,440 Stock as at 1 May 20X6 15,654 Trade debtors 24,500 Fixtures and fittings - at cost 120,740 Provision for depreciation on fixtures and fittings - as at 30 April 20X7 63,020 Depreciation 12,074 334Chapter 28 . Accruals and prepayments and other adjustments for financial statements The following additional information as at 30 April 20X7 is available: (a) Stock at the close of business was valued at f17,750. (b) Insurances have been prepaid by f1, 120. (c) Heating and lighting is accrued by f1,360. (d) Rates have been prepaid by $5,435. (e) The provision for doubtful debts is to be adjusted so that it is 3% of trade debtors. Required: Prepare Mr Chai's trading and profit and loss account for the year ended 30 April 20X7 and a bal- ance sheet as at that date. (Association of Accounting Technicians)
