Answer Happy

The following Trial Balance was extracted from the books of KM Enterprise, a trader as at 31 December 2018, GHS GHE Capital account 1,500,000 Freehold Land & Building 700,00 Furniture & Fittings 140,000 Inventory in Trade-1 Jan. 2018 610,000 Purchases 5,870,000 Sales 6,930,000 Trade Recervables 585.000 Trade Payables 434.500 Rent Received 27.500 Loan from Adwoa Yonkey at 5% pa 120.000 Interest on Adwoa Yankey's loan- Outstanding at 1 Jan 2018 3.000 Discount allowed 132.000 Discount received Allowance for receivables. I Jan. 2018 11,000 Bad debts 32.500 Wages and salaries 704,500 Drawings 160.000 General Expenses N6,500 Bank Balance 68,000 Rate and Insurance 30,000 9.118.500 9.118.500 92.300 The following are to be taken into account: Inventory in trade: 31" December 2018, GH€850,000; wages and salaries outstanding at 31" December 2018 GH€1,500. Rate as paid advance at 31 December 2018 GH€5,000, allowance for receivables is to be increased to GH¢17.000. KM Ent. had not pay interest on Adwoa Yankey during 2018. Part of freehold building was let to tenant who owed GH€2,500 as at 31 December 2018. Prepare a) Income statement for the year 2018 b) A statement of financial position as at 31 December 2018.