Question

Required: Answer each of his questions in terms which he will be able to understand. (Association of Chartered Certified Accountants) . The following trial balance was extracted from the books of R Giggs at the close or business on 28 February 20x7. Dr 157,165 92,800 4,100 324 11,400 Purchases and sales Cash at bank Cash in hand Capital account 1 March 20X6 Drawings Office furniture Rent Wages and salaries Discounts Debtors and creditors Stock 1 March 20X6 Provision for doubtful debts 1 March 20X6 Delivery van Van running costs Bad debts written off 17,100 2,900 3,400 31,400 820 12,316 4,120 160 5,245 405 3,750 615 730 174,375 174,375 Notes: (a) Stock 28 February 20X7 £2,400. (b) Wages and salaries accrued at 28 February 20x7 £340. (c) Rent prepaid at 28 February 20X7 £230. (d) Van running costs owing at 28 February 20X7 £72. (e) Increase the provision for doubtful debts by £91. (1) Provide for depreciation as follows: Office furniture £380; Delivery van £1,250. Required: Draw up the trading and profit and loss account for the year ending 28 February 20X7 together with a balance sheet as on 28 February 20x7.

Answer 1

2 Amount 157165 2400 159565 B Trading and Profit & Loss Account For the year ended February 20x7 Particulars Amount Particulars 4 To Opening Stock A/C 4120 By Sales A/C 5 To Purchases A/C 92800 By Closing stock A/C 6 To Wages and salary A/C 31,400 7 Add: Wages Accrued 340 31740 31740 8 To Gross profit A/C 30905 9 159565 10 11 To Rent A/ C 3 400 By Gross profit A/C 12 Less: Prepaid rent 230 3170 By Discount received A/C 13 To Discount Allowed A/C 14 To Depreciation on furniture A/C 15 To Depreciation on delivery van A/c 1250 16 To Provision for doubtful debt A/c 17 To Bad debt A/C 730 18 To Van running cost A/C (615 +72) 687) 19 To Net profit A/C 23937 20 31065 30905 160 380 91 31065 21

B 27 Amount 4100 324 2400 A 25 Balance Sheet For the year ended February 20X7 Liabilities and capital Amount Assets 28 Creditors (5245 + 72) 5317 Cash at bank 29 Outstanding wages 340 Cash in hand 30 Capital 11,400 Closing stock 31 Add: Net profit 23.937 Office furniture 32 Less: Drawing 17,100 18237 Less: Depreciation Delivery Van Less: Depreciation Prepaid rent Debtors Less: Old Provision Less: New Provision 2520 2,900 380 3,750 1,250 12,316 405 91 11820 23894 23894