Jackfruit Trading is a fruit trading business running by Mr. Jack in Kampar. The following is...
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Jackfruit Trading is a fruit trading business running by Mr. Jack in Kampar. The following is the Trial Balance of the business for the year ended 31 December 2017. Jackfruit Trading Trial Balance as at 31 December 2017 Debit Credit RM RM Accumulated depreciation as at 1 January 2017: Motor vehicles 125,000 Office equipment 25,000 Allowance for doubtful debts as at 1 January 2017 85,000 Bad debts 12,000 Bank overdraft 15,000 Capital as at 1 January 2017 Carriage inwards Carriage outwards 1,000,000 25,000 13,000 Cash 38,000 Discounts 1,000 3,500 Freehold land 988,000 Insurance 29,000 Interest on loan 25,000 18,000 Inventory as at 1 January 2017 Loan from Durian Bank @ 5% 600,000 Motor vehicles 500,000 Office equipment Prepaid insurance as at 1 January 2017 100,000 2,000 Purchases and sales 678,000 959,000 Rentals 33,000 66,000 Returns 64,000 32,000 Salaries 38,000 Trade receivables and payables 850,000 525,000 Upkeep of motor vehicles 19,000 Utilities 2,500 3,435,500 3,435,500 In the course of finalising the accounts, it was discovered that the following items have not been accounted for: (1) Closing inventory was valued at RM16,500. The owner has withdrawn RM1,000 cash and RM3,000 worth of merchandise for his own use throughout the year. (2) Paw Paw, whose debt is amounted to RM3,000, was gone missing for severai months. As a result, the owner has decided to write off that particular debt. (3) On 30 September 2017, one of the motor vehicles owning by the business was (4) involved in a major accident and suffered serious damage. As a result, the insurance company offered a "total loss" compensation of RM20,000 to the business in cash. The motor vehicle was bought on 1 January 2017 with a cost of RM30,000. The interest rate for the loan from Durian Bank stands at 5% per annum. It is also noted that the business has not made any principal payments yet. At the year end, the business has accrued the interest payment by two months. (5) At the year end, insurance was accrued by RM5,000, while rental revenue was prepaid by RM3,000. (6) Motor vehicles are depreciated at 20% per annum on cost, while office equipment is depreciated at 10% per annum on net book value. (7) (8) Allowance for doubtful debts is to be provided at a rate of 5%. The owner has further injected RM100,000 as additional capital into the business bank account. (9) (10) It was found that RM2,000 of purchase return were wrongly captured as sales. Required: Prepare the Statement of Comprehensive Income for the year ended 31 December 2017 (use the vertical format presentation). (a) (17 marks) Prepare the Statement of Financial Position as at 31 December 2017 (use the vertical format presentation). (b) (13 marks) Name FIVE (5) causes of depreciation and explain them to Mr. Jack in a (10 marks) [Total: 40 marks] (c) detailed manner. Jackfruit Trading is a fruit trading business running by Mr. Jack in Kampar. The following is the Trial Balance of the business for the year ended 31 December 2017. Jackfruit Trading Trial Balance as at 31 December 2017 Debit Credit RM RM Accumulated depreciation as at 1 January 2017: Motor vehicles 125,000 Office equipment 25,000 Allowance for doubtful debts as at 1 January 2017 85,000 Bad debts 12,000 Bank overdraft 15,000 Capital as at 1 January 2017 Carriage inwards Carriage outwards 1,000,000 25,000 13,000 Cash 38,000 Discounts 1,000 3,500 Freehold land 988,000 Insurance 29,000 Interest on loan 25,000 18,000 Inventory as at 1 January 2017 Loan from Durian Bank @ 5% 600,000 Motor vehicles 500,000 Office equipment Prepaid insurance as at 1 January 2017 100,000 2,000 Purchases and sales 678,000 959,000 Rentals 33,000 66,000 Returns 64,000 32,000 Salaries 38,000 Trade receivables and payables 850,000 525,000 Upkeep of motor vehicles 19,000 Utilities 2,500 3,435,500 3,435,500 In the course of finalising the accounts, it was discovered that the following items have not been accounted for: (1) Closing inventory was valued at RM16,500. The owner has withdrawn RM1,000 cash and RM3,000 worth of merchandise for his own use throughout the year. (2) Paw Paw, whose debt is amounted to RM3,000, was gone missing for severai months. As a result, the owner has decided to write off that particular debt. (3) On 30 September 2017, one of the motor vehicles owning by the business was (4) involved in a major accident and suffered serious damage. As a result, the insurance company offered a "total loss" compensation of RM20,000 to the business in cash. The motor vehicle was bought on 1 January 2017 with a cost of RM30,000. The interest rate for the loan from Durian Bank stands at 5% per annum. It is also noted that the business has not made any principal payments yet. At the year end, the business has accrued the interest payment by two months. (5) At the year end, insurance was accrued by RM5,000, while rental revenue was prepaid by RM3,000. (6) Motor vehicles are depreciated at 20% per annum on cost, while office equipment is depreciated at 10% per annum on net book value. (7) (8) Allowance for doubtful debts is to be provided at a rate of 5%. The owner has further injected RM100,000 as additional capital into the business bank account. (9) (10) It was found that RM2,000 of purchase return were wrongly captured as sales. Required: Prepare the Statement of Comprehensive Income for the year ended 31 December 2017 (use the vertical format presentation). (a) (17 marks) Prepare the Statement of Financial Position as at 31 December 2017 (use the vertical format presentation). (b) (13 marks) Name FIVE (5) causes of depreciation and explain them to Mr. Jack in a (10 marks) [Total: 40 marks] (c) detailed manner.
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Income statement as on 311217 Amount in RM Sales 959000 Less Ret... View the full answer
Related Book For
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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