Question 3: Preparation of Financial Statement with adjustments

The following is the trial balance of John Adams Sdn Bhd as at 31^st December 2020

	Dr	Cr
	RM	RM
Sundry Expenses	4,000
Sales		240,000
Rental	6,000
Returns Outwards		1,000
Purchases	115,000
Provision for doubtful debts		600
Motor vehicles	40,000
Inventories 1 January 2020	15,000
Wages and Salary	8,000
Vehicle Expenses	6,000
Insurance	6,500
Fixtures	75,000
Drawings	13,000
Communication expenses	2,000
Commissions paid	5,000
Cash at bank and cash in hand	43,000
Carriage Outwards	500
Carriage Inwards	600
Capital		80,000
Accumulated depreciation motor vehicle		9,000
Accumulated depreciation fixtures		15,000
Account Receivables	24,000
Accounts Payables		18,000
	363,600	363,600

Notes to the accounts

1. Inventory at year end was RM 60,000

2. The provision for bad debts as of 31^st December 2020 was RM1,000

3. A 5% discount is to be given for credit sale RM20,000

4. A cash sales transaction amounting to RM8,000 was omitted from the books

5. Drawing during the year by cash amounted to RM4,000

6. In the sundry expense account, payment for personal matters amounted to RM2,000

7. Depreciation on Motor Vehicles was 10% per annum on the straight-line method.

8. Depreciation on Fixtures was 10% per annum on the reducing balance method.
9. Loan from Bank RM 40,000 on 1^st July 2020 at an interest of 3% interest. Interest payment has been made.
10. A posting error on communication expenses was wrongly recorded as follows:

Dr Bank 9,000 Cr Communication expenses RM 9,000