The trial balance of Lumumba Traders at 30 June, 2020 is as follows:

Shs.Shs.

Equipment at cost42,100

Provision for depreciation of

Equipment 1.7.201926,765

Inventory 1.7.20195,870

Accounts Receivable7,666

Provision for doubtful debts

1.7.20191,000

Cash at bank1,875

Capital 1.7.201926,444

Accounts Payable5,049

Purchases31,756

Sales79,220

Carriage Inwards680

Carriage outwards420

Rent 6,500

Electricity1,340

Salaries and wages37,500

Office expenses1,146

Discounts allowed and received2,450825

139,303139,303

Additional information:

1.The balance on the equipment at cost consists of Shs. 34,600 brought forward from the previous year, plus new equipment bought for Shs.7,500 on 1^st July, 2019.

2.Equipment which cost Shs.5,000 on 17 November, 2016 was sold for Shs.3,000 on 11 April 2020.There are no entries made in relation to this transaction.

3.Equipment is depreciated at 20% per annum on the reducing- balance method, with a full year's charge in the year of acquisition and none in the year of disposal.

4.An account receivable of Shs. 1,666 has been found to be uncollectible. The books have not been adjusted. After the adjustment, the provision for doubtful debts is to be increased by Shs. 200

5.Inventory on 30^th June, 2020 was Shs,6,210.

6.On 30^th June, 2020 accrued electricity was Shs.120; prepaid rent was Shs.500 and salaries and wages include Lumumba's drawing of Shs. 1,500 per month.

Required:

1.The equipment account, provision for depreciation account and the equipment disposal account.(6 Marks)

2.The trading, Profit and Loss account for the year ending 30^th June 20120.(8 Marks)

3.The balance sheet as at 30^th June, 2020.(6 Marks)

Answer rating: 100% (QA)

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