Question

6. Following is the trial balance of Pure Gold Enterprise as at 30 June 20X7: Debit RM Credit 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 RM5, 000. 3. Insurance prepaid RM500. 4. The provision for bad debts to be increased to 10% of debtors. 5. Telephone bills outstanding RM220. 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

write in a table

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