Encik Zharif owns a gift shop, Zharif Gift Shop at Queensbay Mall. The shop sells variety...

 

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Encik Zharif owns a gift shop, Zharif Gift Shop at Queensbay Mall. The shop sells variety of local and imported goods. The following Trial Balance was extracted from the books of Zharif Gift Shop on 30 June 2013. 1. 2. 3. 4. 5. 6. Capital Shop lot Motor van Bank Cash a. b. Zharif Gift Shop Trial Balance as at 30 June 2013 Purchases Sales Accounts receivable Accounts payable Transportation inwards Transportation outwards Discounts Return outwards Advertising Water, electricity and telephone Salesman salaries Inventory (1 July 2012) Accumulated depreciation - Motor van Drawings 4% Loan from ImEx Bank DEBIT (RM) Required: 120,000 70,000 20,000 2,500 100,000 8,000 600 1,000 900 3,000 2,000 6,000 48,000 1,000 On 30 June 2013, Encik Zharif asked his accounts officer, Miko to prepare the financial statements for the business. In order to prepare the financial statements, Miko came across a few transactions that require adjustments to be made. The following are the adjustments to be taken into consideration on 30 June 2013: Miko found that the actual amount of advertising expenses for the year was RM2,500. 383,000 CREDIT (RM) 150,000 170,000 20,000 3,000 1,000 14,000 25,000 383,000 The business had already received the water, electricity and telephone bills which amounted to RM600 for the month of June but has still not been paid. Encik Zharif told Miko that he forgot to inform him that on 1 April 2013 he had taken RM300 cash and some goods costing RM200 for his personal use. The bank loan agreement showed that the loan was taken on 2 January 2013. Depreciation for the motor van was provided at RM7,000 per year. No depreciation to be provided for shop lot. Inventory at the end of the year was valued at RM32,000 and the business uses the periodic system to record all the inventories. Explain why the year end adjustments are necessary in preparing the financial statements. (3 marks) Prepare Statement of Profit or Loss and Statement of Financial Position of the business as at 30 June 2013. Encik Zharif owns a gift shop, Zharif Gift Shop at Queensbay Mall. The shop sells variety of local and imported goods. The following Trial Balance was extracted from the books of Zharif Gift Shop on 30 June 2013. 1. 2. 3. 4. 5. 6. Capital Shop lot Motor van Bank Cash a. b. Zharif Gift Shop Trial Balance as at 30 June 2013 Purchases Sales Accounts receivable Accounts payable Transportation inwards Transportation outwards Discounts Return outwards Advertising Water, electricity and telephone Salesman salaries Inventory (1 July 2012) Accumulated depreciation - Motor van Drawings 4% Loan from ImEx Bank DEBIT (RM) Required: 120,000 70,000 20,000 2,500 100,000 8,000 600 1,000 900 3,000 2,000 6,000 48,000 1,000 On 30 June 2013, Encik Zharif asked his accounts officer, Miko to prepare the financial statements for the business. In order to prepare the financial statements, Miko came across a few transactions that require adjustments to be made. The following are the adjustments to be taken into consideration on 30 June 2013: Miko found that the actual amount of advertising expenses for the year was RM2,500. 383,000 CREDIT (RM) 150,000 170,000 20,000 3,000 1,000 14,000 25,000 383,000 The business had already received the water, electricity and telephone bills which amounted to RM600 for the month of June but has still not been paid. Encik Zharif told Miko that he forgot to inform him that on 1 April 2013 he had taken RM300 cash and some goods costing RM200 for his personal use. The bank loan agreement showed that the loan was taken on 2 January 2013. Depreciation for the motor van was provided at RM7,000 per year. No depreciation to be provided for shop lot. Inventory at the end of the year was valued at RM32,000 and the business uses the periodic system to record all the inventories. Explain why the year end adjustments are necessary in preparing the financial statements. (3 marks) Prepare Statement of Profit or Loss and Statement of Financial Position of the business as at 30 June 2013.

Answer rating: 100% (QA)

a The year end Financial statements are necessary because by comp... View the full answer