Chantal Clarke is a sole trader who operates wholesale. The following trial balance was as of March
Question:
Chantal Clarke is a sole trader who operates wholesale. The following trial balance was as of March 31, 2018.
Particulars | DR ($) | CR($) |
Furniture | 150,000 | |
Motor Vehicle | 600,000 | |
Purchases | 1,000,500 | |
Wages | 160,500 | |
Bad debts | 3,000 | |
Provision for depreciation – Furniture | 5,000 | |
Provision for depreciation – Motor Vehicle | 120,000 | |
Capital | 150,000 | |
Loan | 300,000 | |
Bank | 49,500 | |
Rent received from Jermain Brown | 30,000 | |
Discounts | 3,500 | 4,500 |
Returns | 40,000 | 22,000 |
Carriage inwards | 2,500 | s |
Rent paid | 80,000 | |
Provision for bad debts | 1,500 | |
Accounts payable | 94,000 | |
Drawings | 8,000 | |
Stock on April 1, 2017 | 235,000 | |
Cash | 25,500 | |
Accounts receivable | 35,000 | |
Sales | 1,670,000 | |
Commission receivable | 20,000 | |
Insurance | 6,000 | |
Carriage outwards | 18,000 | |
2,417,000 | 2,417,000 |
Notes
a) The monthly payment for insurance is $600 for the year.
b) wages were prepaid $800, commission receivable for the year amounted to $15,000
c) She rents a small section of the building to Jermain Brown, for $4,500 per month starting June 1, 2017, until the end of the accounting year.
d) Chantal Clarke took some goods valued at $3,400 from the wholesale for her daughter’s birthday party. This was not recorded in the books.
e) The provision for bad debt is to be adjusted to 7% of accounts receivable
f) Stock at the yearend was valued at $67,700.
g) Depreciation rates are as follows:
i. Furniture – 10% per annum on the reducing balance basis
ii. Motor Vehicle – 10% per annum on the straight-line basis
Required:
a) Prepare Chantal Clarke’s Statement of Profit or Loss.
b) Prepare Chantal Clarke’s Statement of Financial Position.
Fundamental financial accounting concepts
ISBN: 978-0078025365
8th edition
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward