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Class Work NAME: - SECTION

1) John Brown operated a store and provided a trial balance as of December 31, 20X7 with various revenue, expense, asset and liability accounts. 2) Adjustments included an increase in closing stock, accrued wages, prepaid rates, an increase in provision for doubtful debts, outstanding telephone charges, and depreciation of shop fittings and a van. 3) The document instructs to prepare an income statement for the year ended December 31, 20X7 and a statement of financial position as of that date using the provided trial balance and adjustment information.

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105 views

Class Work NAME: - SECTION

1) John Brown operated a store and provided a trial balance as of December 31, 20X7 with various revenue, expense, asset and liability accounts. 2) Adjustments included an increase in closing stock, accrued wages, prepaid rates, an increase in provision for doubtful debts, outstanding telephone charges, and depreciation of shop fittings and a van. 3) The document instructs to prepare an income statement for the year ended December 31, 20X7 and a statement of financial position as of that date using the provided trial balance and adjustment information.

Uploaded by

palashndc
Copyright
© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
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BA10_C28.

qxd 16/12/04 1:12 pm Page 333

CLASS WORK

NAME: ________________________________ SECTION: ___________________

From the following trial balance of John Brown, store owner, prepare a trading account and profit
and loss account for the year ended 31 December 20X7, and a balance sheet as at that date, taking
into consideration the adjustments shown below:

Trial Balance as at 31 December 20X7

Dr Cr
£ £
Sales 400,000
Purchases 350,000
Sales returns 5,000
Purchases returns 6,200
Opening stock at 1 January 20X7 100,000
Provision for doubtful debts 800
Wages and salaries 30,000
Rates 6,000
Telephone 1,000
Shop fittings at cost 40,000
Van at cost 30,000
Debtors and creditors 9,800 7,000
Bad debts 200
Capital 179,000
Bank balance 3,000
Drawings 18,000
593,000 593,000

(i) Closing stock at 31 December 20X7 £120,000.


(ii) Accrued wages £5,000.
(iii) Rates prepaid £500.
(iv) The provision for doubtful debts to be increased to 10 per cent of debtors.
(v) Telephone account outstanding £220.
(vi) Depreciate shop fittings at 10 per cent per annum, and van at 20 per cent per annum, on cost.

a) Prepare an income statement for the year ended 31 December 20X7.

b) Prepare a statement of financial position as at 31 December 20X7

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