Question

In: Accounting

Mr. Andre Jack is the owner of Smart Toys. Smart Toys does not keep a full...

Mr. Andre Jack is the owner of Smart Toys. Smart Toys does not keep a full set of accounts. The following is a summary of Smart Toys bank account for the year ended

31st December 2019:

RM

RM

Balance 1st January 2019

20,000

Payments to suppliers

58,900

Receipts from customers

75,800

Rent

3,300

Cash sales taking banked

14,000

Utilities

1,700

Sundry expenses

700

Drawings

15,000

Balance c/d

30,200

109,800

109,800

All cash sales had been paid into the bank except RM8,000. Out of this, Smart Toys had paid RM5,000 for purchases of goods for resale and used RM3,000 for personal expenses.

The following additional information is available:

1st January 2019

31st December 2019

Stock

27,700

30,200

Trade Payables

11,200

14,700

Trade Receivables

18,000

17,200

Fixtures

5,000

5,000

Fixtures were purchased on 1st January 2019 and depreciated at 10% per year.

You are required to prepare the following:

a)

Trial Balance as at 01/01/2019. Calculate Owner’s Equity as at 01/01/2019.

b)

Calculate total cash sales.

c)

Account Receivable Ledger as at 31/12/2019. Calculate total credit sales.

d)

Calculate total sales.

e)

Account Payable Ledger as at 31/12/2019. Calculate total credit purchases.

f)

Inventory Ledger as at 31/12/2014. Calculate total COGS.

g)

Calculate total inventory purchases.

h)

Calculated total drawings.

i)

Trial Balance as at 31/12/2019.

j)

Income Statement for the year ended 31/12/2019.

k)

Calculate net book value for Fixtures as at 31/12/2019.

Solutions

Expert Solution

Answer-a:

Trial Balance as at 01/01/2019

Owner’s Equity as at 01/01/2019 = RM59,500

Answer-b:

Total cash sale = RM14,000 + RM8,000 = RM22,000

Answer-c:

Answer-d:

Total sales = Cash sales + credit sales

                  = RM22,000 + RM75,000 = RM97,000

Answer-e:

Answer-f:

Answer-g:

Total inventory purchase = Cash purchase + credit purchase

                                       = RM5,000 + RM62,400 = RM67,400

Answer-h:

Total drawing = RM15,000 + RM3,000 = RM18,000

Answer-i:

Answer-j:

Answer-k:

Net book value for Fixtures as at 31/12/2019 = RM5,000 - RM500 = RM4,500

Depreciation = RM5,000 * 10% = RM500


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