Question

2 Clearwater Enterprise is a merchan Enterprise is a merchandising company which has business operations in Ipoh, The following balances have been extracted from the books as at 31 December 2016. Debit (RM) Credit (RM) Profic or Los 30,000 Income searr) 110,000 Balon shar 250,000 120.000 24,000 40,000 22,500 Machinery Accumulated depreciation - machinery Land LandD2TONE Building dsb rob tol no zivot 20 Accumulated depreciation - building Loan from Ah Ling (10 years) Bank overdraft Accounts receivable Inventories Sdn Accounts payable Drawings Capital Carriage outwards Sales 61,400 58,600 12,400 40,000 200,000 20,000 1,921,000 Discount allowed 22,500

Answer 1

Statement of Income for the year ended 31/12/2016
Revenue
Sales	19,21,000.00
Cost of goods sold	11,36,400.00
Gross Profit	7,84,600.00
Expenses
Carriage outwards	20,000.00
Discount allowed	22,500.00
Salaries expense	2,80,000.00
Bad debts	12,895.00
Interest expense	21,200.00
General expense	37,000.00
Supplies expense	50,000.00
Insurance expense (96000*10/12)	80,000.00
Depreciation Expense-Machinery (20000*10%)	2,000.00
Depreciation Expense-Building (120000*20%)	24,000.00
Total Expenses	5,49,595.00
Net Income	2,35,005.00

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Balance Sheet as at 31/12/2016
Assets
Cash	2,000.00
Accounts receivable	59,900.00
Provision for doubtful debt	-2,995.00
Accounts receivable-Net	56,905.00
Inventories	25,000.00
Prepaid insurance	16,000.00
Supplies	30,000.00
Total Current Asset	1,29,905.00
Machinery	30,000.00
Accumu. Depreciation-Machinery	-12,000.00
Net	18,000.00
Land	2,50,000.00
Building	1,20,000.00
Accumu. Depreciation-Building	-48,000.00
Net	72,000.00
Total Non- Current Assets	3,40,000.00
Total Assets	4,69,905.00
Liabilities
Accounts payable	12,400.00
Bank overdraft	22,500.00
Interest payable	4,000.00
Total Current Liabilities	38,900.00
Loan from Ah Ling	40,000.00
Total Liabilities	78,900.00
Owner's Equity
Capital	2,00,000.00
Net Income	2,35,005.00
Drawings	-44,000.00
Total	3,91,005.00
Total Liabilities and Owner's Equity	4,69,905.00

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Workings:

Adjusted Trial Balance
	Dr	Cr
Cash	2,000.00
Accounts receivable	59,900.00
Provision for doubtful debt		2,995.00
Inventories	58,600.00
Prepaid insurance	16,000.00
Supplies	30,000.00
Machinery	30,000.00
Accumu. Depreciation-Machinery		12,000.00
Land	2,50,000.00
Building	1,20,000.00
Accumu. Depreciation-Building		48,000.00
Loan from Ah Ling		40,000.00
Accounts payable		12,400.00
Bank overdraft		22,500.00
Interest payable		4,000.00
Capital		2,00,000.00
Drawings	44,000.00
Sales		19,21,000.00
Purchases	10,97,000.00
Carriage inwards	5,800.00
Carriage outwards	20,000.00
Discount allowed	22,500.00
Salaries expense	2,80,000.00
Bad debts	12,895.00
Interest expense	21,200.00
General expense	37,000.00
Supplies expense	50,000.00
Insurance expense (96000*10/12)	80,000.00
Depreciation Expense-Machinery (20000*10%)	2,000.00
Depreciation Expense-Building (120000*20%)	24,000.00
	22,62,895.00	22,62,895.00
Closing inventory	25,000.00

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Cost of goods sold
Inventories-opening	58,600.00
Purchases	10,97,000.00
Carriage inwards	5,800.00
Less: Closing inventory	-25000
	11,36,400.00

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