Question 3

The Trial Balance of Out of Direction Enterprise as at 31 December 2014 are as follows:

	Debit RM	Credit RM
Capital		35,000
Drawings	2,150
Vehicles at cost	7,500
Fixture and fittings at cost	30,000
Inventory on 1 January 2014	16,750
Accounts receivables	4,500
Accounts payables		5,050
Cash in hand	3,750
Short-term borrowing		2,000
Rent	4,550
Maintenance	880
Commission		2,080
Interest		1,000
Return inwards	400
Return outwards		1,050
Purchases and Sales	22,140	45,300
Custom duties	2,160
Accumulated depreciation on vehicles		3,000
Provision for doubtful debts		300
	94,780	94,780

Additional information:

1. Inventory on 31 December 2014 was valued at RM18,000.

2. Custom duties owing amounted to RM600.
3. Rent not yet paid amounted RM50.
4. Commission received in advance amounted to RM400.
5. Drawings of cash worth RM550 for personal use had not been taken into account.
6. Maintenance paid in advance amounted RM120.
7. Interest not yet received amounted RM500.
8. Vehicles are depreciated at 10% per annum using straight line method.
9. Fixture and fittings are depreciated at 20% per annum on their original cost.
10. Provision for doubtful debts is to be adjusted to 5% of accounts receivables.

From the above information, you are required to:

1. Prepare Statements of Comprehensive Income (Income Statement) for the year ended 31 December 2014. (20 Marks)
2. Prepare Statements of Financial Position (Balance Sheet) as at that date.

(20 Marks)

(Total: 40 Marks)

Pls show your working and formula on how to calculate the closing stock, Thanks.