Question

Questions Imą, Meena and Duka have been in pastniendo Interest drawingo i 10%pa - Testerdest on capital 24 20% pia for the first six months and 25% for the remaining six month 2019. Ana receives a and Deeka receives la claw of 5400opes quarter RM 2,200 Profit ſ shared at 40% for in a 130% for Meena and 30% for Deeka The following balance were produced for the year ended 31 Dec 2019 DEBIT CREDIT Inventory as at 1 Jan 2019 64,800 Provision for baddebts at 1 Jan 2011 15.6 sales and purchase Carnage Inwards 7,800 wants and ralanes Repairs and maintenant epernsey 3,500 Insurance on Building 43,000 Marriage outwards Advertising expenses 3,250 Provision for depr at 1 Jan 28 38,000 24,920 4,400 Electricity expenses 2100 127,800 4624600 43. Coo 7860 Machinery | Office Equipment Telephone charges Current Account Ina. Meena cs Declared with CamScanner 6.910 160G 9,206

Answer 1

RM Income statement For the year ending 31 December 2019 RM 64800 Sales 127800 Inventory as at 31 Dec. 2019 7800 48600 Inventory as at 1 jan. 2019 Purchases Carriage inwards Wages and salaries Gross profit Total 462600 65500 279100 528100 Total 528100

By Gross profit 279100 2100 1400 3500 8500 48000 28800 19200 7860 3250 9400 Electricity expense Add outstanding Repairs and maintenance expense Insurance on building Less prepaid 48000/20*12 Carriage outwards Advertising Telephone charges General expense Ddepreciation on machinery Ddepreciation on equipment at 20% 124600-24920*20% Provision for bad debts 22500-1600*8% Add bad debts 1000+1600 Less existing provision Net profit Total 16400 22800 19936 1672 2600 -1500 2772 165482 279100 Total 279100

Calculation of depreciation on machinery Cost of machineryl 180000 Less Provision for Depreciation 38000 Book value 142000 Depreciation at 15% 21300 Machinery in July 1 20000 at 15% 6 mont 1500

Note. It is assumed:

1. The machinery brought as capital has not been recorded.

2. Goods taken as drawings already had been credited in purchases. So no special adjustment is made

165482 2917 2063 360 Profit and loss appropration account for the year ending 31 December 2019 Net profit Interest on capital: Interest on drawings: Ina Ina 35000 for 10 months on 35000 80000 for 6 months 20% 8000 Meena 27500 for 9 months 100000 for 6 months 25% 12500 20500 Deeka 14400 for 3 months Meena 80000 for 6 months 20% 80001 Meena 80000 for 6 months 25% 10000 18000 Total Deeka 60000 for 6 months 20% 6000 Deeka 60000 for 6 months 25% 7500 13500 Ina salary 16000 Deeka salary 26400 Division of profit Ina 40% of76421 30568 Meena 30% of 76421 22926 Deeka 30% of 76421 22926 Net profit 76421 170821 170821

Balance B/d Drawings interest on Drawings Balance c/d Current Account RM RM RM Ina Meena Deeka 6910 Balance B/d 35000 27500 14400 interest on capital 2917 2063 360 Salary 30752 21164 41156 68668 50726 62826 RM RM RM Ina Meena Deeka 1600 9800 20500 18000 13500 16000 26400 30568 22926 22926 68668 50726 62826

RM RM 12000 20900 1672 19228 Statement of financial position as on 31 Dec. 2019 Liabilities RM RM Assets Electricity expense outstanding 1400 Bank Creditors 10000 Debtors 22500-1600 Current account: 20900*8%Less provision for doubtful debts Ina 30752 Insurance prepaid Meena 21164 Inventory Deeka 41156 Machinery 180000+20000 Capital account: Less Provision for Depreciation 38000+22800 Ina 100000 Office equipment Meena 80000 Less Provision for Depreciation 24920+19936 Deeka 60000 Total 344472 Total 28800 65500 200000 60800 124600 139200 44856 79744 344472