In: Accounting
The following trial balance was extracted from the books of Big Bamboo Limited on December 31, 2020
Big Bamboo Ltd | ||
Trial Balance as at January 1, 2020 |
||
Motor vehicle at cost |
10,600 |
|
Provision for depreciation on Motor Vehicle |
2,120 |
|
Building at cost |
90,000 |
|
Provision for depreciation on Buildings |
1,800 |
|
Stock at January 1, 2020 |
53,000 |
|
Carriage inwards |
500 |
|
Debtors |
50,130 |
|
Returns Inwards |
6,000 |
|
Returns Outwards |
5,560 |
|
Bad debt provision |
1,100 |
|
Cash |
3,200 |
|
Creditors |
30,350 |
|
Bank overdraft |
15,500 |
|
Sales |
600,000 |
|
Purchases |
440,000 |
|
Wages |
93,200 |
|
Insurance |
54,100 |
|
Discount received |
8,300 |
|
Drawings |
14,000 |
|
Capital |
150,000 |
|
814,730 |
814,730 |
Additional Information:
1. Stock at December 31, 2020 $80,000
2. Payment of $10,100 for insurance relates to the first quarter of 2021.
3. Wages owing $4,800
4. Provision for bad debt is to be increased to $1,500
5. Depreciation on fixed assets:
- Motor vehicles 10% on cost
- Buildings 15 % on the reducing balance method
Required:
Prepare for Big Bamboo Limited:
(a) An income statement for the year ended December 31, 2020
(b) A statement of financial position as at December 31, 2020
Income Statement :-
Particulars | Amount($) | Credit($) |
Net Sale Revenue :- | ||
Sales Revenue | 600000 | |
Less : Return Inwards | 6000 | |
Net Sales | 594000 | 594000 |
Expenses :- | ||
Cost of Goods Sold | 399140 | |
Wages (93200+4800) | 98000 | |
Insurance ($54100-$10100) | 44000 | |
Depreciation on Motor ($10600*10%) | 1060 | |
Depreciation on Building ($90000-$1800)*15% | 13230 | |
Carrige Inwards | 500 | |
Provision for Bad Debts ($1500-$1100) | 400 | |
Total Expenses | 556330 | 556330 |
Net Income | 37670 |
Cost of Goods Sold :-
= Begining Inventory + Purchase - Purchase Return - Discount Received - Ending Inventory
= $53000 + $440000 - $5560 - $8300 - $80000
= $399140
Balance Sheet :-
Asstes | Amount($) | Amount($) |
Current Assets :- | ||
Cash | 3200 | |
Stock | 80000 | |
Prepaid Insurance | 10100 | |
Debtors | 50130 | |
Total Current Assets | 143430 | 143430 |
Fixed Assets :- | ||
Motor Vehicle | 10600 | |
Less : Provision for Depreciation ($2120+$1060) | (3180) | 7420 |
Building | 90000 | |
Less : Provision for Depreciation ($1800+$13230) | (15030) | 74970 |
Total Assets | 225820 | |
Liabilities | ||
Current Liabilities :- | ||
Creditors | 30350 | |
Bad Debt Prvision | 1500 | |
Outstanding Wages | 4800 | |
Bank Overdraft | 15500 | |
Total Current Liabilities | 52150 | 52150 |
Capital | ||
Beginning Capital | 150000 | |
Add : Net Profit | 37670 | |
Less : Drawings | (14000) | |
Total Capital | 173670 | 173670 |
Total Liabilities and Capital | 225820 |