Question 1 The following balances have been extracted from the accounts of Peya, a sole trader,...

Question 1

The following balances have been extracted from the accounts of Peya, a sole trader, for the period ended 31 March 2020.
N$
Sales 427,726
Carriage inwards 476
Wages and salaries 64,210
Carriage outwards 829
Purchases 302,419
Rent and rates 12,466
Heat and light 4,757
Stock at 1 April 2019 15,310
Drawings 21,600
Equipment at cost 102,000
Motor vehicles at cost 43,270
Provision for depreciation
– equipment 22,250
– motor vehicles 8,920
Debtors 50,633
Creditors 41,792
Bank 3,295 cr
Sundry expenses 8,426
Cash 477
Capital 122,890
The following information as at 31 March 2020 is also available:
(1) N$350 is owing for heat and light
(2) N$620 has been prepaid for rent and rates
(3) Depreciation is to be provided for the year as follows:
equipment at 10% on cost and motor vehicles at 20% on cost
(4) Stock at 31 March2020 isN$16,480
Required:
(a) Prepare the trial balance for Peya (before any adjustments) as at 31 March 2020.
(b) Prepare the trading and profit and loss accounts for Peya for the year ending 31 March 2020.
(c) Prepare the balance sheet for Peya as at 31 March 2020.
(Total 31 marks)
Due Date:

Expert Solution

Trial Balance of M/s Peya for the period 31st Mar 2020
particulars	Amount Dr. (N$)	Amount Cr. (N$)
Sales		427726
Carriage I/W	476
Wage & Salaries	64210
Carriage O/w	829
purchases	302419
Rent & rates	12466
Heat & Light	4757
Opening Stocks	15310
Drawings	21600
Equipment at cost	102000
Motor Vehicles at cost	43270
provision for Depriciation - equipmen		22250
provision for Dep.- Motor vehicles		8920
Debtors	50633
Creditors		41792
Bank		3295
Sundry expences	8426
Cash	477
Capital		122890
Total	626873	626873
Trading account for M/s Peya for year ending 31st Mar 2020
Particulars	Amount Dr. (N$)	Particulars	Amount Cr N$
To opening Stock	15310	By Sales	427726
To purchases	302419	By Closing Stocks	16480
To Wage & Salaries	64210
To Carriage I/w	476
To Gross Profit	61791

	444206		444206


Profit & Loss account for M/s Peya for year ending 31st Mar 2020
Particulars	Amount Dr. (N$)	Particulars	Amount Cr. N$
To Carriage O/w	829	By Gross Profit	61791
to Rent & Rates N$ 12466
Less Advance paid N$ 620	11846
to Heat & light N$ 4757
Plus O/s for Heat & light N$350	5107
To Depriciation Equipment	10200
To Dep. Motor Vehicle	8654
To Sundry Expences	8426
To Net profit for the year	16729
	61791		61791
Balance Sheet of M/s Peya as on 31st Mar 2020
Liabilities		Assets
O/s Liability of Heat & Light exp	350	Advance for Rent & rates	620
Creditors	41792	Equipment 102000
Bank	3295	Less Provsion for Dep -22250
Capital 122890		Less Current year Dep.- 10200	69550
Less Drawings - 21600		Motor Vehicles 43270
Plus Net profit for year +16729	118019	lessProvision for Dep -8920
		Less Current year Dep. -8654	25696
		Debtors	50633
		Closing Stocks	16480
		Cash	477
	163456		163456
Note: Alternately, Depriciation on Equipment and Motor vehicles can Be shown on Liability side and Equipment and Motor Vehicles on Asset side may be shown on cost basis as under: Liability Asset Provision for Dep. Equipment (22250+10200) Equipment 102000 Dep.Motor Vehicle (8920+8654) Motor Vehicle 43270 Total of Balance Sheet Liability side (163456+22250+10200+8920+8654)= N$213480 Total of Balance Sheet Asset side = N$ 213480 (It will increase by provisioning amt of Dep. of Equipment & Motor vehicles ie N$ 50024 as now the both of these will be shown on cost basis on asset side in place of net of deprciation.

ekkarill92 answered 6 months ago

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