Zarkos has prepared a trial balance for his business at 30 April 2021 which is presented below: - Debit RM Credit RM Capital – 1 May 2020 30,000 Finance Costs 300 Bank 7,400 Administrative expenses 65,800 Distribution expenses 31,200 Plant and Machinery Cost 72,000 Accumulated Depreciation 1 May 2020 25,000 Trade Receivables 20,000 Allowance for Receivables 1 May 2020 3,150 Revenue 230,000 Inventory 1 May 2020 18,750 Drawings 18,000 Trade Payables 17,500 Purchases 90,000 6% Loan – repayable 31 July 2023 3,000 316,050 316,050 The following notes are relevant to the preparation of the financial statements for the year ended 30 April 2021: 

1. Zarkos took goods that cost RM 5,000 for personal use during the year, but this has not been recorded. 

2. It has been determined that trade receivables of RM 600 are irrecoverable. In addition, it was decided that the allowance for receivables should be reduced by RM 400. 

3. Depreciation on plant and machinery is charged at 15% per annum on a reducing balance basis. Depreciation is charged to the cost of sales. 

4. The loan was taken out on 1 August 2020 and interest has not yet been paid or accrued. 

5. Closing inventory had been at RM 17,500. It was subsequently discovered that some items of inventory that had cost RM 5,000 had a net realizable value of RM 3, 750. 

6. At 30 April 2020, a prepayment for insurance paid in advance of RM 400 had not yet been accounted for. Insurance is classified as an administrative expenses. 

7. At 30 April 2020, an accrual for freight and delivery expenses amounting to RM 350 had not yet been accounted for. Freight and delivery expenses are classified as distribution expenses. 

Required: Prepare a statement of profit or loss of Zarkos the year ended 30 April 2020 and a statement of financial position as at 30 April 2020.

Answer rating: 100% (QA)

Statement of Profit or loss For the year ended 30 April 2020 AmountRM Particulars Revenue Total Inco... View the full answer