QUESTION B3

Mahima Enterprise

Trial balance as at 30 June 2021

	DEBIT	CREDIT
	$	$
Double story building	350,000
Accumulated depreciation Freehold property		50,000
Machinery	220,000
Accumulated depreciation Machinery		104,500
Purchases	720,000
Sales		1,150,000
Inventory as at 1 July 2020	130,000
Discount allowed	44,000
Discount received		13,800
Return Outwards		44,000
Staff salaries	173,700
Bad debts	12,900
Loan interest	12,000
Maintenance	48,900
Mortgage payable		102,500
Trade receivables	115,000
Cash in hand	850
Cash at bank	4,200
Drawings	79,950
Allowance for receivables		1,700
7% long term loan		80,000
Capital		365,000
	1,911,500	1,911,500

Additional information:

1. Closing inventory as of 30 June 2021 has been valued at $117,500.
2. Staff salaries need to be accrued by $2,700.
3. Maintenance(contract) is prepaid by $700.
4. The allowance for receivables is to be adjusted 2% of trade receivables.
5. Depreciation for the year ended 30 June 2021 to be charged as follows:

Asset	Method	Percentage per annum
Freehold property	Straight line	1.5%
Machinery	Reducing balance	25%

REQUIRED:

a. Prepare Statement of Comprehensive Income for the year ended 30 June 2021;

(9 marks)

b. Prepare Statement of Financial Position as at 30 June 2021.

(16 marks)

(Total: 25 marks)