Question

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The following balances were extracted from Chan's ledger on 31 December 2019. Sales Cash at bank Drawings Capital, 1 January 2019 Office premises Fixtures and fittings Bank loan (repayable in 8 years) Trade receivables Returns outwards General expenses Rent and rates Wages and salaries Cash in hand Inventory, 1 January 2019 Purchases Returns inwards Trade payables Loan from Charles (repayable in 3 years) Motor vehicles Travelling expenses Postage and stationery $ 186,958 1,550 4,500 46,000 50,000 28,360 11,360 11,450 614 1,800 3,500 23,500 410 9,876 101,304 322 8,350 3,800 20,000 360 150 Required: (a) Draw up a Trial Balance as at 31 December 2019. (b) Given the closing inventory at year end $4,800, prepare the: Income Statement for the year ended 31 December 2019, and Statement of Financial Position at 31 December 2019.

Answer 1

a

Chan's Trial balance December 31, 2019 Debit ($) Credit ($) 186958 1550 4500 46000 50000 28360 11360 11450 614 1800 Account Titles Sales Cash at Bank Drawing Capital, 1 January 2019 Office premises Fixture and fittings Bank Loan(repayable in 8 years) Trade Receivables Return outwards General expenses Rent and Rates Wages and Salaries Cash in Hand Inventory, 1 January 2019 Purchases Return Inwards Trade Payable Loan from Charles(Repayable in 3 years) Motor Vehicle Travelling Expense Postage and Stationary Total 3500 23500 410 9876 101304 322 8350 3800 20000 360 150 257082 257082

b

Chan's Income Statement For the year ended December 31, 2019 Amount ($) Amount ($) Particular $ 9876|By Sales 101304 Less : Return Inwards (614) 100690 23500 By Closing Inventory 57370 191436 Particular To Inventory, 1 January 2019 To Purchases Less : Return Outwards To Wages and Salaries To Gross Profit Amount ($) Amount ($) 186958 (322) $ 186636 4800 191436 57370 By Gross Profit 1800 To General expenses To Rent and Rates To Travelling Expense To Postage and Stationary 23500 360 150 To Net Profit 51560 $57370 $57370

Amount ($) 8350 3800 Assets Current Asset Cash at Bank Cash in Hand Inventory Trade Receivables Total Current asset Property, Plant and Equipments Office premises Fixture and fittings Motor Vehicle Property, Plant and Equipments - Net Total Assets Chan's Balancesheet For the year ended December 31,2019 Amount ($) Liabilities Current Liabilities 1550 Trade Payable 410 Loan from Charles(Repayable in 3 years) 4800 11450 18210 Total Current Liabilities Long term liabilities 50000 Bank Loan(repayable in 8 years) 28360 Capital , 1 January 2019 20000 Less : Drawings 98360 Add: Net profit 116570 Total liabilities 12150 11360 46000 -4500 51560 93060 116570

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