Question

Question 2 Tumisang Moshe, a sole trader, extracted the following trial balance from his books at the close of business on 31 July 2018 Debat Credit Purchases 65.240 137.425 Sales Capital Bank 45. 20.000 Discount allowed Returns Inwards Returns outwards Carriage inwards Rent Provision for doubtful dichts Office furniture Motor Van 12, 300 10, 500 Accounts Receivables Accounts Payables Drawings Salaries and wages General expenses Total 19,600 42.000 195,670 195,670 Additional Notes 1. Closing inventory 31 March 2017 P6,500 ii. Accrued salaries and wages PS, 000 CBOU 2020 Page 5 of 6 DEGREE January - June Assignment LA212 Introduction to Accounting I. Prepaid rent P800 iv. Provide for depreciation as follows Office furniture P560, Motor van P3.750 REQUIRED: a. Prepare a Statement of Comprehensive Income for the year ended 31 July 2018, (10 marks) b. Prepare a Statement of Financial Position as at 31 July 2018 (10 marks)

Answer 1

a.

Income Statement
Revenues
Sales Revenue	$   137,425
Less : Returns Inwards	$     (3,580)
Less : Discount allowed	$     (2,400)
Net Sales Revenue		$       131,445
Cost of Goods Sold		$         59,750
Gross Profit		$         71,695
Operating Expenses
Rent	$        5,980
Salaries and Wages	$     47,000
Depreciation - Office Furniture	$           560
Depreciation - Motor Van	$        3,750
General Expenses	$           560
Total Operating Expenses		$         57,850
Net Income		$         13,845

b.

Balance Sheet
Assets
Current Assets
Cash	$           200
Bank	$     20,000
Accounts Receivable	$     12,300
Less Provision for doubtful debts	$          -500
Inventory	$        6,500
Prepaid Rent	$           800
Total Current Assets		$         39,300
Non-Current assets
Property, Plant and Equipment
Office Furniture	$        5,600
Less Accumulated Depreciation-Office Furniture	$          -560
Motor Van	$     15,000
Less Accumulated Depreciation-Motor Van	$      -3,750	$         16,290
Total Assets		$         55,590
Liabilities & Owner's Equity
Current Liabilities
Accounts Payable	$     10,500
Wages Payable	$        5,000
Total Current Liabilities		$         15,500
Owner's Equity
Capital	$     40,090
Total Owner's Equity		$         40,090
Total Liabilities & Owner's Equity		$         55,590