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Class Exercise Final Accounts and End of Year Adjusments

The trial balance and additional information provide the financial details of Zach Ltd. as of December 31, 2019. A statement of profit or loss and other comprehensive income and statement of financial position are required. The profit or loss statement will show the company's revenues, expenses, and net income for the year. The statement of financial position will report the company's assets, liabilities, and equity as of December 31, 2019.

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Joshua Otieno
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93 views

Class Exercise Final Accounts and End of Year Adjusments

The trial balance and additional information provide the financial details of Zach Ltd. as of December 31, 2019. A statement of profit or loss and other comprehensive income and statement of financial position are required. The profit or loss statement will show the company's revenues, expenses, and net income for the year. The statement of financial position will report the company's assets, liabilities, and equity as of December 31, 2019.

Uploaded by

Joshua Otieno
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Class exercise: Final Accounts

The trial balance of Zach Ltd. as at 3I December 2019 was as follows:

Sh. Sh.
Capital 200,000
Purchases and Sales 1,220,000 2,000,000
Debtors and Creditors 400,000 140,000
Bank overdraft 380,000
Sales returns 40,000
Buildings at cost 800,000
Motor vehicle at cost 1,000,000
Provision for depreciation:
-Motor vehicle 400,000
-Buildings 40,000
Purchases returns 80,000
Selling expenses 140,000
Bank 160,000
Bank loan 600,000
Stock 1 January 2019 300,000
Provision for bad debts1.1.2019 20,000
Operating expenses 180,000
Administrative expenses 140,000
Returns outwards _______ 200,000
4,220,000 4,220,000

Additional information:
1. Stock at 31 December 2019 was Sh.360,000.
2. A motor vehicle which cost Sh.200,000 was sold on 1.1.2019 for sh 120,000 It had been used for 3 years,
and no record of this transaction was recorded in the books.
3. A debtor of Sh.20,000 has been declared bankrupt. A general provision is required at 5% of debtors.
4. Rates of Sh.30,000 paid in December covering half year to 31 March 2020 have not been
entered in the books.
5. Depreciation on motor vehicle is at 10% on cost and buildings at 2% on net book value.
6. Selling expenses accrued amounted to sh.24,000 at the end of the year
7. Drawing for good by the proprietor amounted to sh.30,000
8. Bad debts amounting to sh 14,000 was written off during the year

Required:
(a) Statement of profit or loss and other comprehensive income account for the year ended
31December 2019.
(b) A statement of financial position at 3 1 December 2019. (10

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