Question
The following trial balance has been extracted from the ledger of Peterson, a sole trader, as at 31 May 2019, the end of his most
The following trial balance has been extracted from the ledger of Peterson, a sole trader, as at 31 May 2019, the end of his most recent financial year.
Peterson
Trial Balance As At 31 May 2019
Dr
Cr
Kshs
Kshs
Property at cost
90,000
Equipment at cost
57,500
Provision for depreciation (as at 1 June 2018)
Property
12,500
Equipment
32,500
Stock as at 1 June 2018
27,400
Purchases
259,600
Sales
405,000
Discounts allowed
3,370
Discounts received
4,420
Wages and salaries
52,360
Bad debts
1,720
Loan interest
1,560
Carriage out
5,310
Other operating expenses
38,800
Trade debtors
46,200
Trade creditors
33,600
Provision for bad debts
280
Cash on hand
151
Bank overdraft
14,500
Drawings
28,930
13% loan
12,000
Capital, as at 1 June 2018
______
98,101
612,901
612,901
The following additional information as at 31 May 2019 is available:
(a)Stock as at the close of business was valued at Kshs 25,900.
(b)Depreciation for the year ended 31 May 2019 has yet to be provided as follows:
Property -1% using the straight-line method
Equipment-15% using the straight-line method
(c)Wages and salaries are accrued by Kshs140.
(d)Other operating expenses include certain expenses prepaid by Kshs 500. Other expenses included under this heading are accrued by Kshs 200.
(e)The provision for bad debts is to be adjusted so that it is 0.5% of trade debtors as at 31 May 2019.
(f)Purchases include goods valued at Kshs1,040, which were withdrawn by Mr Peterson for his own personal use.
Required:
i)Statement of Profit or Loss for the period ended 31st May 2019
ii)Statement of Financial Position as at 31st May 2019
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