Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following trial balance was extracted from the books of J. Brown as at 31 May 2021. DR CR $ $ Purchases and Sales 65,730

The following trial balance was extracted from the books of J. Brown as at 31 May 2021.

DR

CR

$

$

Purchases and Sales

65,730

125,910

Stock at June 1, 2020

15,480

-

Bank overdraft

-

13,050

Capital

-

21,600

Cash

270

-

Discounts

4,320

2,880

Return inwards

2,430

-

Return outwards

-

1,710

Carriage outwards

6,480

-

Carriage inwards

2,850

-

Rent and Rates

5,220

-

Provision for bad debts

-

1,980

Machinery

5,100

-

Van

9,300

-

Provision for depreciation on Vans

-

3,000

Provision for depreciation on Machinery

-

1,500

Accounts Receivable and Payables

35,730

18,180

Drawings

8,640

-

Wages and Salaries

26,820

-

General office expenses

1,440

-

189,810

189,810

Notes:

  1. Closing stock $22,000
  2. Wages and salaries: accrual $900; Office expenses accrued $500
  3. Rent and rates prepaid $800
  4. Increase the provision for bad debts to $2,000
  5. Provision for depreciation Van 10% of cost, and Machinery 15% on the reducing balance method.

(See requirements on next page.)

Required:

  1. Prepare an Income Statement for the year ended May 31, 2021 (30 marks)
  2. From the information provided, list the items that belong in each of the following categories:
  1. Non-Current Assets (2 marks)
  2. Current Assets (4 marks)
  3. Current Liabilities (4 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

GEN COMBO LOOSELEAF FINANCIAL ACCOUNTING CONNECT ACCESS CARD

Authors: Robert Libby ,Patricia Libby ,Frank Hodge

9th Edition

1259912310, 978-1259912313

More Books

Students also viewed these Accounting questions