The following trial balance was extracted from the books of P Brown on 31 December 2017...
The following trial balance was extracted from the books of P Brown on 31 December 2017
Debit Credit
Capital 1 050 000
Inventory 1/01/2017 359 625
Net Purchases 3 246 339
Net Sales 5 545 050
Import duties on purchases 859 161
Discount allowed and received 174 858 60 114
Salaries 575 142
Accounts receivable 643 125
Accounts payable 690 807
Bad debts written off 68 250
Allowance for doubtful debts 32 154
Premises 954 450
Motor Vehicles 283 500
Furniture and Fittings at cost 91 860
Provision for depreciation:
Motor vehicle 73 500
Furniture and Fittings 28 875
Rent income 109 500
Rates and insurance 74 565
Carriage on sales 120 750
5 year loan from FNB 300 000
Cash on hand 7 614
Stationery 42 525
Cash at bank 388 236 ________
7 890 000 7 890 000
Additional information
(i) Closing inventory on 31 December 2017 was valued at N$406 350.
(ii) Rates unpaid amounting to N$9 750 and rent income not yet received N$10 500 are to be taken into account.
(iii) Insurance premiums amounting to N$15 750 relate to the next financial year.
(iv) Inventory of unused stationery on 31 December 2017 was valued at N$4 500.
(v) No record has been made of goods costing N$26 250 withdrawn by the owner for personal use.
(vi) Adjust the allowance for doubtful debts to 8% of accounts receivable.
(vii) The long term loan from FNB was obtained on 1 July 2017 and is subject to 8.75% p.a. interest. This interest has not yet been taken into account.
(viii) Provide 15% depreciation on the net book value of the motor vehicle and 5% on the cost of furniture and fittings.
Required
Draw up a statement of profit or loss and other comprehensive income for the year ended 31 December 2017. [30 marks]
A post-closing trial balance as at 31 December 2017. [15 marks]
A statement of financial position as at 31 December 2017. [35 marks]
Both (a) and (c) must be in vertical format. Show all workings.
Question 2
The following information was extracted from the books of a business on 1 January 2017
2017
1 January Purchases ledger balances returns (Cr) N$27 720
Sales Ledger balances (Dr) N$24 750
Purchases Ledger balance (Dr) 885
Sales Ledger balances (Cr) 1 920
The following transactions took place in the month of January 2017:
January 2017 Purchases Journal 141 750
Sales Journal 157 680
Cheques received from debtors 157 050
Cash sales 105 000
Cash paid to creditors 3 000
Cash purchases 129 000
Cash received from debtors 1 500
Cheques paid to creditors 136 300
Bad debts written off 450
Allowance for doubtful debts 6 000
Discount allowed 1 350
Discounts received 1 800
Returns inwards 1 500
Returns outwards 825
Balances sales Ledger set off against balances in Purchases Ledger 660
Trade discount received 30 000
Balance c/d sales ledger 18 000
Balance c/d purchases ledger 27 000
Required
Prepare Accounts receivable and Accounts payable ledger control accounts from the above information
[20 marks]
Homework Answers
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