Question
Question 1(IS) Aroma Trading is a sundry shop business owned by Mr. Amin. The following trial balance for his business as at 31 December 2022
Question 1(IS) 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.
the Statement of Profit or Loss and Other Comprehensive Income for the year ended 31st December 2022 is
RM | RM | RM | |
Sales | 330,000 | ||
Less: Return Inwards | -3,000 | ||
Net Sales | 327,000 | ||
Less: Cost Of Good Sold (COGS) | |||
Opening Inventory | 45,000 | ||
Add: Purchases | 240,000 | ||
Less: Return Outwards | -2,000 | ||
Net Purchase | 238,000 | ||
Add:Carriage Inwards | 3,400 | ||
Less: Closing Stock | -38,000 | ||
COGS | 248,400 | ||
Gross Profit (Net sales - COGS) | 78,600 | ||
Add:Revenue | |||
Rental received | 14,000 | ||
Discount received | 4,600 | ||
Interest expense | 1,232 | ||
Total Other Income | 19,832 | ||
98,432 | |||
Less:Expenses | |||
Wages and salaries | 27,000 | ||
Discount allowed | 2,200 | ||
Utilities expenses (3800 + 1600) | 5,400 | ||
Carriage outwards | 1,500 | ||
Insurance expenses (7900 - 600) | 7,300 | ||
Motor Vehicle | 20000 | ||
Office Equipment | 5625 | ||
Interest on loan (1232 + 1250) | 2482 | ||
Bad debts expenses (3000 + 750) | 3750 | ||
Selling expenses | 8,800 | ||
Allowance for doubtful debts (26000-500-3000 x 5%) | 1125 | ||
Total Expenses | 85,182 | ||
Net Profit/Loss | 13,250 |
required: Prepare the Statement of Financial Position as at 31st December 2022.
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