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Jay Brooks prints and publishes study materials. He has prepared the following trial balance as at...

Jay Brooks prints and publishes study materials. He has prepared the following trial balance as at 30 June 2017: Dr Cr

$ $

Purchases 60 000

Inventory at 1 July 2016 10 000

Sales 120 000

Distribution costs 13 200

Administrative and selling expenses 5 600

Trade receivables 12 200

Discount allowed 1 550

Bank balance 4 150

Capital account at 1 July 2016 73 100

Discount received 2 500

6% Bank loan 10 000

Non-current assets at carrying amount 102 500

Capital introduced in the year 5 000

Loan interest paid 300

Drawings 8 000

Trade payables 5 600

Wages 15 000

Suspense 8 000

228 350 228 350

The following is to be taken into account.

Inventory valuation at 30 June 2017 was $12 000

Jay decided to write off an irrecoverable receivable of $1 000. This should be accounted for as an administrative and selling expense.

The wages cost should be split equally between cost of sales and administrative and selling expenses.

Discounts allowed should be accounted for as an administrative and selling expense.

The bank loan was taken out on 1 July 2016

The depreciation charge for the year of $5 000 on property, plant and equipment has not yet been accounted for. It should be classified as a cost of sale.

The balance on the suspense account represents the proceeds from the disposal of an item of property, plant and equipment. At the date of disposal, that item had a net carrying amount of $10 000. The gain or loss on disposal should be accounted for as a cost of sale.

Prepare the statement of profit or loss for the year ended 30 June 2017, together with the statement of financial position as at 30 June 2017 on behalf of Jay Brooks

Expert Solution

ekkarill92 answered 6 months ago

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