Question

Nhende Store had the trial balance below

Trial balance as at 31 December 2018

                                                                        DR                              CR

                                                                        $                                  $

Purchases and sales                                         35 000                         40 000

Sales and Purchases returns                                 500                              620

Opening stock                                                 10 000                        

Provision for doubtful debts                                                                     80

Wages and salaries                                          3 000                                      

Rates                                                                  600

Telephone                                                           100  

Shop fitting at cost 4                                      4 000

Van at cost                                                      3 000  

Debtors and creditors                                        980                               7 00

Bad debt                                                              20

Capital                                                                                                 17 900

Bank balance                                                      300

Drawings                                                         1 800

                                                                      59 300                           59 300

Additional information

1. Closing stock $12 000                        
2. Accrued wages $500

• Rates prepared $50

1. Provision for doubtful debts to be increased by 10% of debtors
2. Telephone account outstanding $22
3. Depreciation shop fittings 10% Van 20% on cost

Required:

Draw up a statement of comprehensive income for the year ended 31 December 2018 and a statement of financial position as at that date [25].

Answer 1

Nhende Store
Comprehensive Income Statement
For Year Ended December 31, 2018
Sales		$40,000
Less: Sales returns		$500
Net Sales			$39,500
Cost Of Goods Sold
Opening Stock		$10,000
Purchases	$35,000
Less: Purchases returns	$620
Net Purchases		$34,380
Less: Closing Stock		$12,000	$32,380
Gross Profit			$7,120
Expenses
Wages and salaries		$3,500
Rates		$550
Telephone Expenses		$122
Bad Debts		$118
Depreciation shop fittings		$400
Depreciation Van		$600
Total Expenses			$5,290
Net Profit			$1,830
Nhende Store
Balance Sheet
As at December 31, 2018
Fixed Assets	Cost	AD	Net Book Value
Shop fitting	$4,000	$400	$3,600
Van	$3,000	$600	$2,400
			$6,000
Current Assets
Closing Stock		$12,000
Debtors	$980
Less Provision for doubtful debts	$178	$802
Cash		$300
Rent Prepaid		$50
		$13,152
Less Current Liabilities
Creditors	$700
Expenses Accrued ($500 + $22)	$522	$1,222
Net Current Assets			$11,930
Net Total Asset			$17,930
Owner Equity
Opening Capital		$17,900
+ Net Profit		$1,830
		$19,730
- Drawings		$1,800
Net Total Liabilities			$17,930