Question
The following balances were extracted from the books of Jon Stayinside as at December 31, 2018. He is a sole trader who opened his wholesale
The following balances were extracted from the books of Jon Stayinside as at December 31, 2018. He is a sole trader who opened his wholesale store in Albany on January 1, 2015. His monthly rental is $18,000. This expense will remain the same for 8 years. Jon Stayinside rented Getthevax Johnson a very small section of the store for $2,000 per month.
PARTICULARS | DR | CR |
Sales | 3,017,700 | |
Capital | 450,000 | |
Bad debts | 5,000 | |
Stock at January 1, 2018 | 235,000 | |
Purchases | 1,910,500 | |
Returns | 42,200 | 22,500 |
Wages | 440,500 | |
Rent Payable | 180,000 | |
Rates | 85,500 | |
Motor Vehicle | 800,000 | |
Provision for Depreciation - Motor Vehicle | 120,000 | |
Drawings | 26,000 | |
Loan | 900,000 | |
Equipment | 950,000 | |
Provision for Depreciation - Equipment | 95,000 | |
Debtors | 35,000 | |
Fixtures & Fittings | 150,000 | |
Provision for Depreciation Fixtures & Fittings | 5,000 | |
Provision for bad debts | 1,500 | |
Commission Received | 12,000 | |
Discounts | 7,500 | 4,500 |
Carriage Inwards | 2,500 | |
Rent Received (from Getthevax Johnson) | 30,000 | |
Creditors | 97,000 | |
Bank | 140,000 | |
Cash | 25,500 | |
4,895,200 | 4,895,200 |
Year end notes:
a) Depreciate Equipment at 10% on reducing balance, the motor vehicles at 10% on the straight line basis, fixtures & Fittings 10% reducing balance basis
b) Rates are owing $35,000, Wages are prepaid $8,000 and Commission Received is owing $3,000
c) Stock at December 31, 2018 $42,300, however it appears that an additional amount, $10,700 was found in a store room. The amount was deemed material and should be accounted for.
d) On November 1, 2018, Jon took goods amounting to $5,000 from the warehouse and continued to do so at the beginning of every month up to March 2019.
e) The Provision for bad debts is to be revised to 15 % of debtors
Required:
1. Prepare the Statement of Profit or Loss for Jon Stayinside with appropriate headings. (30 marks)
2. Prepare a Statement of Financial Position for Jon Stayinside, with appropriate headings. (20 marks)
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