Question 5

The following trial balance was extracted from the books of Al Mawaleh Traders, sole trader as at 31 May 2018.

Trial balance as at 31 May 2018

	Debit	Credit
	$	$
Capital		51,960
Drawings	4,280
Premises at cost	54,000
Sundry debtors and creditors	7,500	6,228
Opening stock	11,100
Salaries	5,280
Carriage inwards	2,190
Carriage outwards	2,340
Rates and insurance	2,790
Purchases and sales	97,400	140,185
Returns inwards and outwards	780	1,440
Advertising	1,041
Bad debts	240
Discount Received		960
Office equipment at cost	6,000
Shop fittings at cost	18,000
Provision for depreciation:
Office equipment		1,200
Shop fittings		4,800
Cash in hand	1,020
Bank overdraft		7,488
Provision for bad debts		300
	214,261	214,261

You are given the following additional information:

(i) Stock valued at 31 May 2008 was $12,600

(ii) Salaries due but unpaid $1,800

(iii) Rates and insurance prepaid $310

(iv) The provision for bad debts is to be adjusted to 5% of debtors outstanding on 31 May 2008

(v) Depreciation is written off fixed assets as follows:

Office equipment 10% per annum using the straight line basis

Shop fittings 5% per annum using the reducing balance basis

You are required to:

Prepare the Statement of Profit or Loss (Income Statement) for the year ended 31 May 2018 and a Statement of Financial Position as at that date,