QUESTION 1

The following trial balance was extracted from the books of Danso's Collections. She deals in

women's wear at the Accra Mall.

DR CR

$ $

Stock (Jan 1 2014) 85,700

Trade debtors 13,000

Trade creditors 22,000

Discount received 2,000

Wages and salaries 29,550

Telephone charges 1,700

Motor expenses 4,400

Equipment at cost 42,000

Motor vehicles at cost 28,000

Purchases 225,350

Sales 294,550

Sales returns 4,850

Purchases returns 2,950

Balance in bank account (Ecobank) 3,900

Cash in hand 720

Drawings 7,150

Carriage inwards 1,500

Carriage outwards 1,300

Capital 127,620

449,120 449,120

Additional information:

i. Stock at 31 December 2014 was $160,000

ii. Provision for depreciation for the year are:

equipment $8,400 and vehicles $5,500

Required:

Prepare trading, profit and loss account for the year ended 31 December 2014.

Prepare balance sheet as at that date.