Question

Meng Kong, a sole trader extracted the following trial balance from his books at the close of business on 31st December 2018

RM RM

Cash in hand 600

Purchases and sales 118,540 285,710

Accounts receivable and Accounts payable 37,540 18,290

Drawings 12,000

Sales returns and purchases returns 1,350 890

Premises 75,000

Equipment 14,400

Inventory (at 01.01.2018) 29,600

Bank charges 2,200

Wages and salaries 78,310

Rates, insurance, electricity 19,840

Vehicle expenses 16,960

Telephone, stationery and postage 4,750

Bad debts 400

Sundry expenses 3,820

Bank balance 13,800

Capital (at 31.12.2017) 96,620

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415,310 415,310

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Closing inventory as at 31st December 2018 is RM 31,500.

Required:

Prepare for Meng Kong:

(a) An Income Statement for the year ended 31st December 2018.

(b) A Balance Sheet as at 31st December 2018.