Lin has been in business as a retailer and the following balances were extracted from his...

 

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Lin has been in business as a retailer and the following balances were extracted from his books on 31 December 1998. Capital, 1 July 1998 Stock, 1 July 1998 Freehold premises (at cost) Carriage on purchases Debtors Creditors Bad debts written off Purchases Sales receipts Returns inwards Returns outwards Discount received Wages Rent and rates Lighting Insurance Cash in hand Bank overdraft S 7,000 2,644 6,400 590 3,500 2,300 896 28,485 39,592 415 614 412 6,200 1,000 114 452 63 841 You are required to prepare the Trading, Profit and Loss Accounts for the half year ended 31 December 1998 and a Balance Sheet as at that date showing as much detail as possible and taking into account the following: (i) The closing stock was valued at $2,089; (ii) Lin had withdrawn for his own personal use, $100 from the sales receipts every month. This has not been taken into account; (iii) A provision of 5% of debtors is to be created; (iv) of the $452 for insurance, $68 was insurance premium for Lin's own private dwelling; (v) It was estimated that $37 was owing for lighting. Lin has been in business as a retailer and the following balances were extracted from his books on 31 December 1998. Capital, 1 July 1998 Stock, 1 July 1998 Freehold premises (at cost) Carriage on purchases Debtors Creditors Bad debts written off Purchases Sales receipts Returns inwards Returns outwards Discount received Wages Rent and rates Lighting Insurance Cash in hand Bank overdraft S 7,000 2,644 6,400 590 3,500 2,300 896 28,485 39,592 415 614 412 6,200 1,000 114 452 63 841 You are required to prepare the Trading, Profit and Loss Accounts for the half year ended 31 December 1998 and a Balance Sheet as at that date showing as much detail as possible and taking into account the following: (i) The closing stock was valued at $2,089; (ii) Lin had withdrawn for his own personal use, $100 from the sales receipts every month. This has not been taken into account; (iii) A provision of 5% of debtors is to be created; (iv) of the $452 for insurance, $68 was insurance premium for Lin's own private dwelling; (v) It was estimated that $37 was owing for lighting.

Answer rating: 100% (QA)

Step 1 Financial Statements or Final Accounts Financial statements are the statement which are prepa... View the full answer