Question

R. Sedeno had the following assets and liabilities on 31^st December, 2019.

Items                                                  $                      Items                          $

Cash                                                    100                 Bank                            2,180

Stock                                                  5,900                Petty Cash                120

Furniture and Fittings                      6,800              Equipment                 3,200

Motor Vehicle                                    17,500             Premises                   40,000

Debtors:                                                                     Creditors:

            L. Robertson                          1,900                          T. Hosein        250

            H. Henry                                 520                             N. Akua           1,200

Transactions during the month of January 2020 were as follows:

1          Paid N. Akua’s account less 5% discount by cheque.

2          Bought $20 stamps and $40 in stationery from cash.

3          Withdrew $200 cash from bank for office use.

6          Cash sales $1,600 of which $1,600 was banked.

8          Paid wages $800 and advertising expense $300 by cheque.

14        Robertson paid his account in cash less 3% discount.

            He bought a further $400 worth of goods on credit.

16        Received a month’s rent for a sub-let office $1,500 by cheque.

18        Cash purchase of $1,800.

20        Sedeno drew a $1,250 cheque for private use and made a down-payment of $1,000 to Ocean View Resort for a family vacation in August.

22        Bought a computer $5,000 on credit from T. Hosein.

23        Bought $860 worth of goods from T. Hosein on credit.

            Paid for cleaning supplies $36 in cash.

25        Bought a computer desk $3,000 on credit from T. Hosein.

26        Paid wages $1,200 by cheque. Returned $160 of goods bought from T. Hosein on 23^rd January. Paid Hosein’s account at the beginning of the month in cash.

28        Sold good to H. Henry invoiced at $600 less 10% trade discount.

            Purchase goods $430 on credit from N. Akua.

30        Henry returned $40 of the goods bought the previous day and paid the balance in cash.

            Sedeno borrowed $2,000 from his sister C. Sedeno.

31        Petty Cashier is reimbursed.

            **********

Closing stock was counted and value at $4,800.

A. Prepare the Final Accounts:

1. Trading and Profit and Loss Accounts
2. Balance Sheet

Answer 1

There are some adjustments which are been calculated as under:

Jan 1 Paid N. Akua = $1,200 - 5%(discount)

= 1200-60

= $1,140 has been paid.

Jan 14 Received from L. Robertson = $1,900 - 3%

= 1900 - 57

= $1,843 amount received

Also there is a further sale to him which will increase his balance to $400.

Jan 28 Sales to Henry = $600 - 10%(trade discount)

= 600 - 60

= $540 to be received from Henry.

Jan 30 Goods returned from Henry = $40

Return Value = 40-10% (trade discount)

= $36

Amount received from Henry = $540 - $36(return)

= $504

Petty cash A/c

Dr Cr

Particulars	Amount($)	Particulars	Amount($)
To Opening Balance	120	By Stamps	20
To Bank	200	By Stationery	40
To Sales	1,600	By Bank	1,600
To Robertson	1,843	By Purchases	1,800
To Henry	504	By Cleaning Supplies	36
		By T. Hosein	250
		By Bank	521
Total	4,267	Total	4,267

It is assumed that the petty cash is reimbursed to bank and all the purchase sale transaction are also routed through petty cash account.

Trading and Profit and Loss A/c as on 31st January 2020

Dr Cr

Particulars	Amount($)	Particulars	Amount($)
To Opening Stock	5,900	By Sales(1600+400+600) 2,600
To Purchases(1800+860+430) 3,090		Less - Sales retuen (40)	2,560
Less - Purchase return (160)	2,930	By Closing Stock	4,800
		By Gross Loss c/d	1,470
Total	8,830	Total	8,830
To Gross Loss b/d	1,470
To Stamps	20	By Discount received(60)	60
To Stationery	40	By Rent from Sub letting	1,500
To Discounts given(57+60-4)	113
To Wages (800+1200)	2,000
To Advertising Expense	300	By Net Loss c/d	2,419
To Cleaning Supplies	36
Total	3,979	Total	3,979

Balance Sheet as on 31st January 2020

Liabilities	Amount($)	Assets	Amount($)
Capital (balancing figure)	76,770	Fixed Assets:
		Furniture & Fittings (6,800+3,000)	9,800
Less: Drawings	(1,250)	Motor Vehicle	17,500
Loan from C Sadeno	2,000	Equipment	3,200
		Premises	40,000
Current Liabilities:		Computer	5,000
Creditors:
T. Hosein   (250+5000+3000+860-250-160)	8,700	Current Assets:
N. Akua	430	Bank (2180-1140-200+1600-800-300+1500-1250-1200+2000+521)	2,911
		Cash	100
		Stock	4,800
		Debtors:
		L. Robertson	400
		Henry	520
		Profit & Loss	2,419
Total	86,650	Total	86,650

As no details on capital is given hence the balancing figure in the BS is considered as Capital.

Please feel free to as doubts.