Above is given trial balance for the 30 March 2007 During 31

Above is given trial balance for the 30 March 2007

During 31 March 2007, the business made the following transactions.

(a) Bought materials for $1,000, half for cash and half on credit

(b) Made $1,040 sales, $800 of which was for credit

(c) Paid wages to shop assistants of $260 in cash

(d) Sales were 45,000$, 50% of them in cash

(e) trade payables decreased by 30%

(f) bought fixtures and furniture in credit amounting 23,120$

Requirement:

Prepare income statement for the year ended 31 march 2007

Prepare balance sheet for the year ended 31 march 2007

Accounts Balance Bank loan Cash at bank Capital Local business taxes Trade accounts payable Purchases Sales Sundry payables Trade accounts receivable Bank loan interest Other expenses Vehicles 12,000 11,700 13,000 1,880 11,200 12,400 14,600 1,620 12,000 1,400 11,020 2,020

Solution

Trial bal Adjustments Dr Cr Bank Loan 12000 Cash At bank 11700-500 (Cr purchases) + 240(Sales)-260(wages) 11180 Capital 13000+3360 16360 loacal Business taxes 1880 Trade Ac Receivable 12000+800(Cr Sales) 12800 Purchases 12400+1000 13400 Sales 14600+1040 15640 Sundry Payables 1620 Trade Ac Payable 11200+500(Cr Purchases)-3360 (30% Decrease) 8340 Bank Loan interest 1400 Other Exp 11020 vehicles 2020 Wages 260 260 Fixtures and Furniture 23120 Loan on Purchase of Fixture and Furniture 23120 Total 77080 77080 Income Statement for the Year ended 31st March 2007 Particulars Amount$ Sales 15640 Purchases -13400 Gross Profit 2240 Less- Wages 260 Bank Loan interest 1400 Other Exp 11020 loacal Business taxes 1880 Net Profit/(loss) -12320 Balance Sheet for the Year Ended 31st March 2007 Particulars Amount$ Equity and Liabilty 1) Shareholders Funds a)Capital 16360 b)Reserves and Surplus -12320 2) Non Current Liability a) Bank lOan 23120+12000 35120 3) Current Liabilty a) Sundry Payables 8340+1620 9960 Total 49120 Non Current Assets Tangible 23120+2020 25140 Current Assets Cash At bank 11180 Trade Ac Receivable 12800 Total 49120