Question 3

The following trial balance was extracted from the books of Madhumitha at 31 January 2020.

RM RM

Capital 1 February 2019 55,686

Drawings 4,800

Premises at cost 30,000

Equipment at valuation 4,500

Fixtures and fittings at cost 5,400

Provision for depreciation of fixtures and fittings 1,080

Inventory 1 February 2019 7,500

Trade receivables 4,900

Bad debts 50

Bad debts recovered 150

Provision for doubtful debts 116

Carriage outwards 700

Sales 58,200

Purchases 51,400

Purchases returns 2,300

Trade payables 5,100

Bank 5,240

Administration expenses 7,960

Discount allowed 182

_______ ______

122 632 122 632

Additional information:

1. Madhumitha did not value her inventory on 31 January 2020 due to an oversight. Her gross profit is 20% of sales.
2. The provision for doubtful debts is to be maintained at 2% of trade receivables.
3. Equipment was valued at RM3,800 on 31 January 2020. No equipment was bought or sold during the year ended 31 January 2020.
4. Fixtures and fittings are to be depreciated by 10% per annum on cost.

You are required to prepare:

1. The Income Statement of Madhumitha for the year ended 31 January 2020. (10 marks)
2. The Statement of Financial Position of Madhumitha as at 31 January 2020. (10 marks)

(Total: 20 marks)