Question

PLEASE TURN OVER Hows Question 20 20 Marks The trial balance extracted from the books of Tailor Times Ltd at 31 December 2003 was as Follows: Share capital 200,000 27.500 Profit and loss account 31 December 2002 Freehold premises at cost Provision for depreciation on freehold premises at 31 December 2002 $4,000 Machinery at cost (84,000 Provision for depreciation on machinery account as at 31 December 2002 21,000 Purchases 563,700 Sales 925,300 General expenses 14,600 Wages and salaries 179,400 Business rates 6100 Electricity 4,800 Bad debts 1,400 Provision for doubtful debts at 31 December 2002 Debtors Creditors (68,300 Stock in trade 31 December 2002 81,900 (Bank balance 16,200 1,297,300 1,297,300 You are given the following additional information: (O The authorized and issued share capital is divided into 400,000 ordinary shares of Sop each w Stock in trade at 31 December 2003, R94, 300:19 COW Wages and salariés due at 31 December 2003 amounted to R1,800 BOX (UV Business rates paid in advance at 31 December 2003 amounted to R700, VYA dividend of R20, 000 is proposed for 2003. X(The provision for doubtful debts is to be increased to R1,500. (vii) A depreciation charge is to be made on freehold premises of R25.000 and machinery at the rate of 20 per cent per annum on cost. 74,200 Required: A trading and profit and loss account for 2003. (20 Marks)

Calculate a trading and loss account

Answer 1

Tailor Times Ltd.
Trading, Profit and Loss Account for 2003
Opening stock - Dec. 31, 2002	R81,900	Sales	R925,300
Purchases	R563,700	Closing stock - Dec. 31, 2003	R94,300
Electricity	R4,800
Gross Profit	R369,200
	R1,019,600		R1,019,600
		Gross Profit	R369,200
Wages and Salaries Expense	R1,800
General Expenses	R14,600
Bad Debts [(R1,500 - R1,400)+(R1,400)]	R1,500
Depreciation expense (R25,000 + R84,000*25/100)	R46,000
Net Profit	R305,300
	R369,200		R369,200