Course work 3 for Financial Accounting due on 4th July 2021 Gomesi provided the following balances from his books at 31st Dec 2020.
Item $
Capital 10000
Drawings 4000
Equipment at cost 15500
Provision for Depreciation on Equipment 3100
Inventory at 1st January 2020 1765
Trade Receivables 1290
Bank overdraft 575
Trade Payables 1600
Sales Revenue 31250
Purchases 18000
Purchases Returns 910
Carriage inwards 610
Returns inwards 250
Bad debts written off 330
Provision for doubtful debts 200
Discount Received 815
Rent and insurance 5700
Commission receivable 1200
Office expenses 425
Discount Allowed 119
Furniture and Fittings at cost 2000
Provision for Depreciation on Furniture & Fittings 369
Additional Information
1. Inventory on 31st Dec 2020 was valued at $ 1000
2. Rent for $ 600 was prepaid on 31/12/2020 and Insurance for $700 was Accrued on
31/12/2020
3. The policy of Gomesi is to depreciate Equipment at a rate of 25% per annum using
reducing balance method and Furniture and Fittings at a rate of 20% on cost
4. Provision for doubtful debts is to be maintained at a rate of 10 % on trade receivables at
the end of the year.
5. Gomesi had taken goods worth $400 for his personal use and no record made in the
books of accounts.
Required
a) Prepare a trial balance as at 31/12/2020
b) Prepare an Income Statement for the financial year ended 31/12/2020
c) Prepare the Statement of Financial Position as at 31st Dec 2020