write in a table 6. Following is the trial balance of Pure Gold Enterprise as at

Question

write in a table

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

Explanation / Answer

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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