Question

In: Accounting

The following is account information for MOK Company as of December 31, 2019.             Sales           ...

The following is account information for MOK Company as of December 31, 2019.

            Sales                                $98,207           Equipment                                  $44,000

            Bank Loan (3 years)       2,500      Acc. Depreciation, Equipment      14,000

            Capital                         27,203           Accounts Receivable                  12,000

            Accounts Payable            10,950           Electricity                                  1,500

            Other Expenses               9,200           Cash                                              1,000

            Return Inwards            900      Discount Allowed                500

      Return Outwards           370     Discount received                 470

            Stock                              10,000           Withdrawal                                 7,500

      Purchases              50,100      Rent and Rates               17,000

The following additional information is provided:

1. Rent of $500 is prepaid.

2. Electricity of $350 is accrued.

3. Equipment is depreciated using the reducing balance method at a rate of 20% per annum.

4. Mr. Mok, the owner took stock for his own use that cost $450. No entry was made in the books in respect of this.

5. The closing stock is $12,000.

6. Bad debts of $150 are to be written off.

Required:

Prepare the Income Statement of MOK Company for the year to 31 December 2019 and  

  the Statement of Financial Statement as at that date in report format.                 

Solutions

Expert Solution

Discount allowed is deducted from sales and Discount received is deducted from purchases. Instead they can be separately Shown. Goods taken by ownner is drawings and it will reduce cost of purchase.

Accumulated depreciation = 14,000 + 6,000 = 20,000.


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