Question 1

Aroma Trading is a sundry shop business owned by Mr. Amin. The following trial balance for his business as at 31 December 2022 was extracted from his books.

Aroma Trading Trial Balance as at 31 December 2022

Accounts	Debit (RM)	Credit (RM)
Inventory on 1 January 2022	45,000
Cash	5,950
Bank	11,500
Accounts receivable	26,000
Allowance for doubtful debts		500
Accounts payable		22,250
Capital		70,000
Motor Vehicle	100,000
Office Equipment	30,000
Accumulated Depreciation Motor vehicle		40,000
Accumulated Depreciation office equipment		7,500
Sales		330,000
Return inwards	3,000
Purchases	240,000
Return outwards		2,000
Carriage inwards	3,400
Carriage outwards	1,500
Drawings	3,600
Discount allowed	2,200
Discount received		4,600
Utilities expenses	3,800
Insurance expenses	7,900
Bad debts expenses	750
Selling expenses	8,800
Interest on loan	1,250
Wages and salaries	27,000
Rental received		14,000
Long term loan, 8% p.a		30,800
Total	521,650	521,650

Additional information:

1.Inventory as at 31 December 2022 was RM38,000.

2.Included in the insurance expense was a general insurance amounting to RM600 which was for the next accounting period.

3.Interest on bank loan for half a year was unpaid.

4.One of the accounts receivables was declared a bankrupt. The amount owing to Aroma Trading was RM3,000.

5.Utilities expenses for December 2022 amounting to RM1,600 have not been included in the accounts.

6.The owner took out cash amounting worth RM300 for personal dinner celebration with his family.

7.Allowance for doubtful debts is to be adjusted to 5% of net account receivables.

8.Depreciation is to be charged as follow: i.Office Equipment 25% on reducing balance method ii.Motor Vehicles 20% on straight line method

Note: Show all relevant workings Required:

(b) Prepare the Statement of Financial Position as at 31st December 2022. (20 marks)