Question

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Below is the Trial Balance of L&G Trading as at 31 December 2019 RM RM Capital 300,000 Computer & Software 30,000 Office Equipment 12,500 Motor Vehicles 285,000 Sales 885,500 Purchases 525,000 Sales Returns 3,150 Purchases Returns 1,550 Carriage Inwards 1,450 Fire Insurance 2,640 Rental 72,000 Water & Electricity 24,650 Salaries 108,000 Sundry Expenses 750 Printing & Stationery 880 Telephone Charges 3,430 Opening Stocks 42,350 Incentive 5,700 Discount Received 650 Cash in Hand 2,550 Cash at Bank 19,620 Trade Receivables 74,500 Trade Payables 26,470 1,214,170 1,214,170

Additional information:

i. Stocks on 31 December 2019 was RM45,360.

ii. Fixed assets are to be depreciated at 20% on cost.

iii. Electricity charges payable as at 31 December 2019 was RM1,250.

iv. Provision for doubtful debts is set at 2%.

Required:

a. Prepare the Statement of Comprehensive Income for the year ended 31 December 2019 .

b. Prepare the Statement of Financial Position as at 31 December 2019 . 

Answer 1

LG Trading Income Statement For the yearEnded 31 Dec 2019 Particulars Note RM Sales Revenue Less:Sales Returns RM 885500 3150 882350 Cost of Goods Sold Cost of inventory consumed Carriage inwards 1 519790 1450 521240 361110 2640 72000 25900 108000 2 Gross Profit Selling & Administrative Expenses Fire Insurance Rental Water & Electricity Salaries Sundry Expenses Printing & Stationary Telephone charges Incentive Depreciation on Fixed Assets Provision for doubtful assets 750 880 3430 3 5700 65500 1490 4 286290 748201 Net Income

RM 24000 10000 228000 262000 2 LG Trading 3 Statement of Financial Postion 4. Asof 31 Dec 2019 5 Particulars Note RM 5 Fixed Assets Computer & Software 30000 3 less: Depreciation 6000 Office Equipment 12500 o less: Depreciation 2500 1 Motor Vehicles 285000 2 less: Depreciation 57000 3 Total Fixed Assets 4 5 Current Assets 6 Cash in Hand 2550 7 Cash at Bank 19620 8 Trade receivables 73010 9 Inventory 45360 0 Total current Assets 1 Total Assets -2 3 Liabilities -4 Trade Payables 26470 5 Electricity Charges Payable 1250 6 Total Liabilities -7 -8 Equity 9 Capital 300000 0 Net Income 74820 -1 Total Equity -2 Total liabilities and Equity 1405401 402540 27720 374820 402540

Notes

Note-1 Opening Inventory Add:Purchases 42350 525000 567350 Less Closing Inventory Discount Received Purchase Returns 45360 650 1550 47560 519790 Cost of inventory consumed

Note-2

Water and Electricity Payable 24650 1250 25900

Note-3

	Amount	Depreciation @20%
Computer nad Equipment	30000	6000
Office Equipment	12500	2500
Motor Vehicles	285000	57000
Total Depreciation		65500

Note-4

Trade Receivables	74500
Provision on doubtful Debts @ 2%	1490
Closing TradeReceivables	73010