Question

In: Accounting

Debit (RM) Credit RM) Account receivables/payables 165,520 72,440 Carriage inwards 3,520 Inventory as at 1/1/2019 65,980...

Debit

(RM)

Credit

RM)

Account receivables/payables

165,520

72,440

Carriage inwards

3,520

Inventory as at 1/1/2019

65,980

Carriage outwards

4,360

Discount allowed/received

2,680

60

Electricity and water

25,100

Loan from Maybank (long-term loan)

80,000

Return inwards/outwards

3,840

3,580

Bank

10,400

Premises

160,000

Motor vehicles

56,000

Furniture and fittings

27,600

Cash

2,160

Accumulated depreciation – Motor vehicles

20,160

Accumulated depreciation – Furniture and fittings

8,280

Salaries and wages

68,600

Bad debts

2,940

Rent received

7,500

Printing and stationeries

9,400

Drawings

3,560

Insurance expenses

18,200

Purchases/sales

592,380

844,300

Allowance for doubtful debts

5,920

Capital as at 1/1/2019

180,000

1,222,240

1,222,240

The following information needs to be taken into consideration:

  1. Depreciation are to be provided based on the following:

Motor vehicles – 20% on book value, yearly basis

Furniture and fittings – 10% on cost, yearly basis

  1. A portion of the business premise was rented out for RM1,500 per month starting from 1 September 2019.

  1. A debtor, Tania was declared a bankrupt in June 2019. The amount owed by him amounting to RM2,720 has not been adjusted yet.

  1. A debtor, Azeem paid RM740 cash for his debt which had been written off two years ago.

  1. It is the company policy of the firm to provide 5% allowance for doubtful debts on the outstanding account receivables.
  1. Maybank approved the loan in July 2019 and charged interest at the rate of 8% per annum.
  1. The amount of insurance premium paid is for a coverage period of 13months starting from August 2019.
  1. The expenses below are still outstanding as at year end:

Salaries and wages RM4,690

Electricity and water RM   710

  1. The owner had consumed some goods worth RM12,680 and withdrew cash RM1,000 for personal use.

  1. Inventory as at 31 December 2019 was RM69,900.

Required:

  1. Prepare a Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2019.

  1. Prepare a Statement of Financial Position as at 31 December 2019.

Solutions

Expert Solution

ADJUSTED TRIAL BALANCE:

Unadj Trial Balance

Adjustments

Adjust Trial Balance

Acc Titles

Dr.

Cr.

Dr.

Cr.

Dr.

Cr.

Acc Rec

165520

2720

162800

Acc Pay

72440

72440

Carriage in

3520

3520

Inventory

65980

12680

53300

Carriage out

4360

4360

Dis allow

2680

2680

Dis recd.

60

60

Elec & water

25100

710

25810

Loan from bank (LT)

80000

80000

Return inwards

3840

3840

Return outwards

3580

3580

Cash

2160

740

1000

1900

bank

10400

10400

premises

160000

160000

Motor Vehi

56000

56000

Acc Dep - MV

20160

27968

48128

Furnit & Fittings

27600

27600

Acc Dep- FF

8280

2760

11040

Sales

844300

844300

Rent received

7500

1500

6000

Salaries & wages

68600

4690

73290

Bad Debts

2940

4200

7140

Print & Stati

9400

9400

Drawings

3560

13680

17240

(1000+12680)

Insur exp.

18200

11200

7000

Purchases

592380

592380

Allow for DD

5920

2220

8140

(165520-2720)*0.05=8140

Capital

180000

180000

Depreciation exp.

30728

30728

Rent in advance

1500

1500

Int exp.

3200

3200

(80000*8%*6/12)

Int payable

3200

3200

Insu Prepaid

11200

11200

(18200*8/13)

Salaries & wages payable

4690

4690

Elec & water payable

710

710

TOTAL

1222240

1222240

70648

70648

1263788

1263788

Income Statement Comprehensive:

Amount RM

Sales

844300

Less:Carri o/w

-4360

Less:Dis allowed

-2680

Less:Return inwards

-3840

Net Sales

833420

Less:COGS:

Inv Op

53300

Add:Purchases

592380

Less:Purchase return

-3580

Less:Inv Close

-69900

Add: Carri inwards

3520

Less:Discount recd

-60

COGS

575660

Gross Profit

257760

Less:Expenses:

Salaries & wages

73290

Bad Debts

7140

Print & Stati

9400

Insur exp.

7000

Depreciation exp.

30728

Int exp.

3200

Elec & water

25810

Total expenses

156568

Operating income before tax

101192

Add: Rent received

6000

Income before tax

107192

Less:taxes

0

Net Income

107192

Balance Sheet (Financial Position):

Assets

Amount RM

Cash

1900

bank

10400

Acc Rec

162800

Allow for DD

-8140

Inventory

69900

Insu Prepaid

11200

Current Assets

248060

Long term assets:

premises

160000

Motor Vehi

56000

Acc Dep - MV

-48128

Furnit & Fittings

27600

Acc Dep- FF

-11040

Total Assets

432492

Liabilities & Capital

Amount RM

Acc Pay

72440

Rent in advance

1500

Int payable

3200

Salaries & wages payable

4690

Elec & water payable

710

Current Liabilities

82540

Loan from bank (LT)

80000

Capital

180000

Add:Net Income

107192

Less:Drawings

-17240

Capital closing

269952

Liabilities & Capital

432492

ekkarill92 answered 2 years ago
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