Question

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The following is the Trial Balance obtained from Round Enterprise as at 31 ^st. December 2009.

	Debit (RM).	Credit (RM).
Capital.		22,490
Cash at bank	16,000
Cash in hand	900
Inventory (as at 1st January 2009)	7,320
Account receivables.	8,200
Account payables		6,300
Fixture and fittings	4,800
Vehicles	32,000
Purchases	36,200
Sales		71,800
Returns	500	300
Commission received		1 ,660
Carriage outwards	460
Discount received		620
Carriage inwards	790
Provision for doubtful debt		800
Accumulated depreciation on vehicles.		3,200

              

107,170

107,170

Additional information:

1 .     Inventory as at 31 ^st December 2009 was valued at RM 13,440.

2. Accrued revenue and expenses during the year were as follows:
   1. Commission received RM200 ii. Carriage inwards RM440
3. Prepaid revenue and expenses during the year were as follows:
   1. Discount received RM 330

ii. Carriage outwards RM 150

4. Vehicles are depreciated at 10% per annum.
5. Provision for doubtful debts is 5% of accounts receivables.

From the above information, you are required to:

1. Prepare Statements of Profit or Loss (Income Statement) for Round Enterprise for the year ended 31 ^st December 2009.
2. Prepare Statements of Financial Position (Balance Sheet) as at that date. Thanks appreciate your help.

Answer 1

Income Statement:
		Amount $
Sales revenue	71800
Less :sales return	-500
Net Sales		71300
Commission recd.	1660
Less: accrued commission	-200
Net commission recd.		1460
Discount rece	620
Less: prepaid	-330
Net discount recd.		290
Net Revenues		73050
Less: COGS:
opening inventory	7320
add: Purchases	36200
less: closing inventory	-13440
Less: purchase return	-300
Net COGS		29780
Gross Profit		43270
Expenses:
Carriage outwards	460
Less: prepaid	150
Net carriage outwards		310
Carriage inwards	790
Less: accrued carriage inwards	440
Net carriage inwards		350
Bad Debt	(8200*10% -800)	20
Depreciation	32000*10%	3200
Total expenses		3880
Net Income		39390

Balance Sheet as on Dec 31, 2009
Liabilities and Capital	amount $	Assets	amount $
accounts payable	6300	Cash at bank	16000
Accrued discount	330	Cash in hand	900
Accrued commission	200	Inventory closing	13440
Current liabilities	6830	account receivables	8200
Capital	22490	Less:Provision for D.Debt	-820	(8200*5%)
Retained Earnings	39390	Prepaid carriage outwards	150
		Prepaid carriage inwards	440
		Current assets	38310
		Fixture and fittings	4800
		vehicles	32000
		Less: Acc.Dep.	-6400	(3200+3200)
Total Liabilities and Capital	68710	Total Assets	68710