Section D Question 1 J. Brighl drew up thc following trial balanee as a 30 Scple
ID: 2431125 • Letter: S
Question
Section D Question 1 J. Brighl drew up thc following trial balanee as a 30 Scplember 2008. You are to draft an Income Statement for the ycar to 30 Scptember 2008 and a Balance Sheet as at that date Dr (5) Cr (S) 5,000 25,955 Loan from P. Parkin Capital Drawings Cash bank Cash a hand Dcblors Credilors Stock 30 September 2007 Molor Van Office Hquipmcnu Provision for Deprccialion mor van Provision for Deprecialion: of equipmct Sales Purchascs Relurn Inwards Carriage Inwards Retrn Outwards Cariage Oulwards Rent Reccived Molor xpenscs Rent and rales Telephone Sala Insurancc Office Expcnscs Sundry Hxpenses 8.420 13,115 295 12,300 9,370 23,910 6,000 8,000 1,900 1,750 130,900 92,100 550 215 307 309 10,000 1.630 2.970 405 12.810 492 1.377 284 185.182 185.182 Notes: (a) Prepaid expenses: insurancc, S105 (h) Hxpenss owing: rent, $300; elephone $85 (c) Rent reccived include $2,000 for the year 2009 (d) The owner estimates Iha! 2% or deblors will be bad and a provision is lo be sel up lor Ihese. (ej Stock s al 30 Seplcmber 2008 is valucd al $27,475 ) Depreciate motor van al 20% reducing balance, o nice cquipmen1 al 10% on cost.Explanation / Answer
Income Statement
For the year ending September 30, 2008
Debit
Credit
Stock
23910
Sales (130900 – 550)
130350
Purchases………..92100
Stock
27475
Less: Return outwards 307
91793
Carriage inward
215
Gross margin
41907
158375
158375
Carriage outward
309
Gross margin
41907
Motor expenses
1630
Rent received (10000 – 2000)
8000
Rent and rates (2970 + 300)
3270
Telephone (405 + 85)
490
Salary
12810
Insurance (492 – 105)
387
Office expense
1377
Sundry expense
284
Dpreciation on motor van
820
Depreciation on office equipment
800
Provision for bad debts
246
Net income
27484
49907
49907
Balance Sheet
As on September 30, 2008
Liabilities & Equity
Assets
Capital……………..25955
Cash at bank
13115
Less: Drawings…..(8420)
Cash at hand
295
Add: Net income…27484
45019
Debtors…………..12300
Loan from P. parkin
5000
Less: Bad debt….(246)
12054
Creditors
9370
Stock
27475
Rent received in advance
2000
Motor van…………6000
Outstanding rent
300
Less: Acc. Dep…..(2720)
3280
Outstanding telephone
85
Office Equip………8000
Less: Acc. Dep…..(2550)
5450
Prepaid insurance
105
61774
61774
Income Statement
For the year ending September 30, 2008
Debit
Credit
Stock
23910
Sales (130900 – 550)
130350
Purchases………..92100
Stock
27475
Less: Return outwards 307
91793
Carriage inward
215
Gross margin
41907
158375
158375
Carriage outward
309
Gross margin
41907
Motor expenses
1630
Rent received (10000 – 2000)
8000
Rent and rates (2970 + 300)
3270
Telephone (405 + 85)
490
Salary
12810
Insurance (492 – 105)
387
Office expense
1377
Sundry expense
284
Dpreciation on motor van
820
Depreciation on office equipment
800
Provision for bad debts
246
Net income
27484
49907
49907
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.