Question 2

The following is account information for MOK Company as of December 31, 2019.

Sales$98,207Equipment$44,000

Bank Loan (3 years)2,500 Acc. Depreciation, Equipment 14,000

Capital27,203Accounts Receivable12,000

Accounts Payable10,950Electricity1,500

Other Expenses9,200Cash1,000

Return Inwards900Discount Allowed500

Return Outwards370Discount received470

Stock10,000Withdrawal7,500

Purchases50,100Rent and Rates17,000

The following additional information is provided:

1. Rent of $500 is prepaid.

2. Electricity of $350 is accrued.

3. Equipment is depreciated using the reducing balance method at a rate of 20% per annum.

4. Mr. Mok, the owner took stock for his own use that cost $450. No entry was made in the books in respect of this.

5. The closing stock is $12,000.

6. Bad debts of $150 are to be written off.

Required:

Prepare the Income Statement of MOK Company for the year to 31 December 2019 and

the Statement of Financial Statement as at that date in report format.(50 marks)