The following trial balance was extracted from the books of P Brown on 31 December 2017

Debit Credit

Capital 1 050 000

Inventory 1/01/2017 359 625

Net Purchases 3 246 339

Net Sales 5 545 050

Import duties on purchases 859 161

Discount allowed and received 174 858 60 114

Salaries 575 142

Accounts receivable 643 125

Accounts payable 690 807

Bad debts written off 68 250

Allowance for doubtful debts 32 154

Premises 954 450

Motor Vehicles 283 500

Furniture and Fittings at cost 91 860

Provision for depreciation:

Motor vehicle 73 500

Furniture and Fittings 28 875

Rent income 109 500

Rates and insurance 74 565

Carriage on sales 120 750

5 year loan from FNB 300 000

Cash on hand 7 614

Stationery 42 525

Cash at bank 388 236 ________

7 890 000 7 890 000

Additional information

(i) Closing inventory on 31 December 2017 was valued at N$406 350.

(ii) Rates unpaid amounting to N$9 750 and rent income not yet received N$10 500 are to be taken into account.

(iii) Insurance premiums amounting to N$15 750 relate to the next financial year.

(iv) Inventory of unused stationery on 31 December 2017 was valued at N$4 500.

(v) No record has been made of goods costing N$26 250 withdrawn by the owner for personal use.

(vi) Adjust the allowance for doubtful debts to 8% of accounts receivable.

(vii) The long term loan from FNB was obtained on 1 July 2017 and is subject to 8.75% p.a. interest. This interest has not yet been taken into account.

(viii) Provide 15% depreciation on the net book value of the motor vehicle and 5% on the cost of furniture and fittings.

Required

Draw up a statement of profit or loss and other comprehensive income for the year ended 31 December 2017. [30 marks]

A post-closing trial balance as at 31 December 2017. [15 marks]

A statement of financial position as at 31 December 2017. [35 marks]

Both (a) and (c) must be in vertical format. Show all workings.

Question 2

The following information was extracted from the books of a business on 1 January 2017

2017

1 January Purchases ledger balances returns (Cr) N$27 720

Sales Ledger balances (Dr) N$24 750

Purchases Ledger balance (Dr) 885

Sales Ledger balances (Cr) 1 920

The following transactions took place in the month of January 2017:

January 2017 Purchases Journal 141 750

Sales Journal 157 680

Cheques received from debtors 157 050

Cash sales 105 000

Cash paid to creditors 3 000

Cash purchases 129 000

Cash received from debtors 1 500

Cheques paid to creditors 136 300

Bad debts written off 450

Allowance for doubtful debts 6 000

Discount allowed 1 350

Discounts received 1 800

Returns inwards 1 500

Returns outwards 825

Balances sales Ledger set off against balances in Purchases Ledger 660

Trade discount received 30 000

Balance c/d sales ledger 18 000

Balance c/d purchases ledger 27 000

Required

Prepare Accounts receivable and Accounts payable ledger control accounts from the above information

[20 marks]