Question

6. Following is the trial balance of Pure Gold Enterprise as at 30 June 20x7 Debit Credit RM Sales Purchases Sales returns Purchase returns Beginning Inventory Provision for bad debts Wages and salaries Insurance Expense Telephone charges Equipment at cost Van Debtors and creditors Bad debts Capital Bank Drawings 400,000 350,000 5,000 6,200 100,000 800 30,000 6,000 1,000 40,000 30,000 9,800 200 7,000 179,000 3,000 18,000 593,000 593,000 Additional Information: 1. Inventory as at 30 June 20X7 was RM120, 000. 2. Accrued wages RMS, 000. 3. Insurance prep 4. The provision for bad debts to be increased to 10% of debtors. 5. Telephone bills outstanding RM220 aid RM500. You are required to: a. Prepare a trading and profit and toss account for the year ended 30 June 20x7 b. Prepare a balance sheet, as at 30 June 20X7

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Answer #1
TRADING AND PROFIT AND LOSS ACCOUNTS
To Opening stock 100000 Sales 400000
To Purchases 350000 Less: Returns 5000 395000
Less: Returns 6200 343800 To closing stock 120000
To Gross profit c/d 71200
515000 515000
By Gross profit c/d 71200
To Wages and salaries (30000+5000) 35000
To Insurance expense (6000-500) 5500
To Telephone charges (1000+220) 1220
To Bad debts (200+180) 380 42100
To Net profit transferred to capital 29100
71200 71200
BALANCE SHEET
ASSETS LIABILITIES
Current Assets: Current liabilities:
Bank 3000 Creditors 7000
Debtors 9800 Accruals 5220 12220
Provision for bad debts -980
Inventory 120000
Prepaid insurance 500 132320
Fixed Assets: Capital 179000
Equipment 40000 Drawings -18000
Van 30000 70000 Net profit 29100 190100
202320 202320
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