Papaye is a popular eatery in town as McDonalds in the U.S where most people buy and eat from. The business has witnessed significant growth over the years and the most recent trial balance extracted has been provided to you as follows:

Additional information: 

a) Inventory 31" December, 2010 amounted to GHC15,500,135 

b) The business invested in a 90-day Treasury bill which attracts an interest rate of 20% p.a. The interest is six months in arrears. Interest income received for the 1* six months has not been recorded in the books. 

c) At the beginning of the year 2010, the business took the long-term loan from Republic bank. The interest on the loan has not been paid. 

d) Rent expense was paid on 13" March, 2010 for the year to 28th February, 2019. 

e) Depreciate furniture and fittings and computer and accessories at 20% using the straight- line method. Use the reducing balance method to depreciate motor vehicle at 15%. 

f) Adjust provision for doubtful debt to 5% of trade receivables. g) Santo's junior sister works in the business as sales attendant and receives a salary of GHC635. This amount has been included in the drawings account. 

You are required to: Prepare the Income Statement for the year ended 31st December, 2010 and the Statement of Financial Position as at that date.

Transcribed Image Text:

Trial Balance as at 31 December, 2010; Furniture and Fittings Computer and Accessories Motor vehicle Provision for Depreciation: Purchases and Sales Inventory 31/12/2009 Cash and Bank Trade Receivable Trade Payables Treasury Bills Provision for Doubtful Debt Bad Debt Rent Carriage outwards Discount Allowed Discount Received General Expenses Salaries Return Inwards Return Outwards Fuel Expenses Furniture and Fittings Computer and Accessories Motor Vehicle Commission Payable Capital Drawings Dr GHC'000 4,935 4,335 6,335 56,665 12,835 10,485 25,135 9,555 635 1,535 735 485 1,935 4,975 535 1,735 835 1,385 Cr GHC'000 855 615 575 107,685 7,135 935 785 1,135 20,135 Trial Balance as at 31 December, 2010; Furniture and Fittings Computer and Accessories Motor vehicle Provision for Depreciation: Purchases and Sales Inventory 31/12/2009 Cash and Bank Trade Receivable Trade Payables Treasury Bills Provision for Doubtful Debt Bad Debt Rent Carriage outwards Discount Allowed Discount Received General Expenses Salaries Return Inwards Return Outwards Fuel Expenses Furniture and Fittings Computer and Accessories Motor Vehicle Commission Payable Capital Drawings Dr GHC'000 4,935 4,335 6,335 56,665 12,835 10,485 25,135 9,555 635 1,535 735 485 1,935 4,975 535 1,735 835 1,385 Cr GHC'000 855 615 575 107,685 7,135 935 785 1,135 20,135

Answer rating: 100% (QA)

ANSWER Statement of Financial Position Balance Sheet Definition A balance Sheet or Statement of Fina... View the full answer