PART A The following list of balances was extracted from the books of Mark Smith at 31 December 2021, the sole trader’s
Posted: Thu May 19, 2022 2:12 pm
PART A
The following list of balances was extracted from the
books of Mark Smith at 31 December 2021, the sole trader’s year end
date. The bookkeeper was unable to extract the figure for the
Capital account before catching the flu and having to take sick
leave. However, the bookkeeper assured that all the other account
balances are correct, which means that extracting trial balance
will be able to solve the 'missing' Capital account
balance.
Capital
?
Accounts payables
80,320
Accounts receivables
92,189
Accruals
12,723
Bad debts expense
15,369
Bank
24,257
Carriage in
5,962
Carriage out
7,690
Closing stock
48,492
Commissions received
1,642
Depreciation expense
71,842
Discounts allowed
20,142
Discounts received
8,370
Drawings
81,000
Equipment
486,000
Insurance
18,922
Interest expense
7,668
Loan
135,000
Motor Vehicles
162,000
Opening stock
42,930
Other payables
7,128
Prepayments
5,746
Provision for depreciation - Equipment
145,800
Provision for depreciation - Motor Vehicles
64,800
Provision for doubtful debts
1,026
Purchases
535,464
Returns in
2,787
Returns out
3,618
Sales
768,366
Telephone
22,313
Water rates
13,986
Required
For the list of balances above, you are required
to:
Extract a trial balance from the above list of balances
(filling in the correct Capital figure)
PART B
The following considerations are to be taken into
account for the yearend financial statements:
An accrual of $500 is to be included for water
rates
The insurance expense includes a prepayment of
$1,200
Depreciation for the month of December was omitted from
the list. It is to be included in the financial statements as
follows:
Equipment $2,100
Motor vehicles $1,500
Required
Prepare the Income Statement for the year ended 31
December 2021.
Prepare the Balance Sheet as at 31 December
2021.
Hint - The "Provision" accounts figures are to be taken
away from their respective asset accounts. Refer to the “Guiding
Light” question for guidance.
The following list of balances was extracted from the
books of Mark Smith at 31 December 2021, the sole trader’s year end
date. The bookkeeper was unable to extract the figure for the
Capital account before catching the flu and having to take sick
leave. However, the bookkeeper assured that all the other account
balances are correct, which means that extracting trial balance
will be able to solve the 'missing' Capital account
balance.
Capital
?
Accounts payables
80,320
Accounts receivables
92,189
Accruals
12,723
Bad debts expense
15,369
Bank
24,257
Carriage in
5,962
Carriage out
7,690
Closing stock
48,492
Commissions received
1,642
Depreciation expense
71,842
Discounts allowed
20,142
Discounts received
8,370
Drawings
81,000
Equipment
486,000
Insurance
18,922
Interest expense
7,668
Loan
135,000
Motor Vehicles
162,000
Opening stock
42,930
Other payables
7,128
Prepayments
5,746
Provision for depreciation - Equipment
145,800
Provision for depreciation - Motor Vehicles
64,800
Provision for doubtful debts
1,026
Purchases
535,464
Returns in
2,787
Returns out
3,618
Sales
768,366
Telephone
22,313
Water rates
13,986
Required
For the list of balances above, you are required
to:
Extract a trial balance from the above list of balances
(filling in the correct Capital figure)
PART B
The following considerations are to be taken into
account for the yearend financial statements:
An accrual of $500 is to be included for water
rates
The insurance expense includes a prepayment of
$1,200
Depreciation for the month of December was omitted from
the list. It is to be included in the financial statements as
follows:
Equipment $2,100
Motor vehicles $1,500
Required
Prepare the Income Statement for the year ended 31
December 2021.
Prepare the Balance Sheet as at 31 December
2021.
Hint - The "Provision" accounts figures are to be taken
away from their respective asset accounts. Refer to the “Guiding
Light” question for guidance.