Question
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:
- Closing stock $22,000
- Wages and salaries: accrual $900; Office expenses accrued $500
- Rent and rates prepaid $800
- Increase the provision for bad debts to $2,000
- Provision for depreciation Van 10% of cost, and Machinery 15% on the reducing balance method.
(See requirements on next page.)
Required:
- Prepare an Income Statement for the year ended May 31, 2021 (30 marks)
- From the information provided, list the items that belong in each of the following categories:
- Non-Current Assets (2 marks)
- Current Assets (4 marks)
- Current Liabilities (4 marks)
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