B. Prepare Bank Reconciliation Statement. Section C Long answer question (ONE compulsory question) Ashra Construction LLC
Question:
B. Prepare Bank Reconciliation Statement.
Section C – Long answer question (ONE compulsory question)
Ashra Construction LLC is a leading building material firm in Muscat. The trial balance of the firm is given as under for the year to 31 December 2020 :
Details | Amt. OMR | Amt. OMR |
Sales | 3,120,000 | |
Purchases | 1,700,000 | |
Furnitures and Fittings | 752,000 | |
Furniture and Fittings | ||
accumulated Depreciation as at 1 Jan 2020 | 290,000 | |
Inventory at 1 Jan 2020 | 374,000 | |
Cash Balance | 515,000 | |
Accounts Receivables | 1,081,500 | |
Accounts Payables | 796,500 | |
Buildings | 2,850,000 | |
Buildings Accumulated Depreciation as at 1 Jan 2020 | 1,740,000 | |
Sales and Marketing Overheads | 246,000 | |
Legal fees | 32,000 | |
Insurance | 104,000 | |
Interest | 6,000 | |
Advertising expense | 2,000 | |
Retained earnings as at 1 Jan 2020 | 316,000 | |
Capital as at 1 Jan 2020 | 1,400,000 | |
7,662,500 | 7,662,500 |
The following additional information is also available:-
a) Closing Inventory at the 31 December 2020 was valued at OMR 332,000
b) Insurance includes an invoice for OMR 60,000 the year ending 30 June 2021.
c) Sales and Marketing overheads of OMR 55,000 were still outstanding at the year end
d) Depreciation is provided on a straight line basis of 5% on cost for Buildings and 12% on the cost of Furniture's and Fittings.
Required:
- Prepare Income statement using multi-step method with appropriate period end adjustments.
- Prepare Balance -Sheet in an appropriate format with period end adjustments.
- Identify an example of Pre-paid expense from the above given data and explain the concept of Prepayment.
Identify an example of accrued expense from the above given data and explain the concept of accrued income and expense.
Financial and Managerial Accounting
ISBN: 978-0132497978
3rd Edition
Authors: Horngren, Harrison, Oliver