GIANTS, a sole trader extracted the following trial balance from her books at the close of...

 

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GIANTS, a sole trader extracted the following trial balance from her books at the close of business on 31st December, 2016: Purchases and sales Inventory 1 January, 2016 Capital 1 January, 2016 Bank overdraft Cash Discounts Returns Carriage outwards Rent and insurance Allowance for doubtful debts Fixtures and fittings Van Accounts receivable and trade payable Drawings Wages and salaries General office expenses Dr GHC 61,420 7,940 140 2,480 3,486 3,210 8,870 1,900 5,600 12,418 21,400 39,200 319 168.383 Cr GHC 127,245 25,200 2,490 62 1,356 630 11,400 168.383 Additional information: (a) Inventory 31st December, 2016 GHC 6,805 (b) Wages and salaries accrued at 31st December, 2016 GHC 3,500; Office expenses GHC 16 (c) Rent prepaid 31st December, 2016 GHC 600 (d) Increase in allowance for doubtful debts by GHC 110 to GHC 740 (e) Provide for depreciation as follows: Fixtures and fittings GHC 190 and Van GHC 1,400 5 Required: a) Prepare the income statement for the year ending 31st December, 2016 (12 marks) b) Prepare statement of financial position as 31 December 2016 (12 marks) c) Explain four accounting concepts and indicate where they are applicable in the income statement and statement of financial position you have prepare under questions a and b (8 marks) Total = 30 marks GIANTS, a sole trader extracted the following trial balance from her books at the close of business on 31st December, 2016: Purchases and sales Inventory 1 January, 2016 Capital 1 January, 2016 Bank overdraft Cash Discounts Returns Carriage outwards Rent and insurance Allowance for doubtful debts Fixtures and fittings Van Accounts receivable and trade payable Drawings Wages and salaries General office expenses Dr GHC 61,420 7,940 140 2,480 3,486 3,210 8,870 1,900 5,600 12,418 21,400 39,200 319 168.383 Cr GHC 127,245 25,200 2,490 62 1,356 630 11,400 168.383 Additional information: (a) Inventory 31st December, 2016 GHC 6,805 (b) Wages and salaries accrued at 31st December, 2016 GHC 3,500; Office expenses GHC 16 (c) Rent prepaid 31st December, 2016 GHC 600 (d) Increase in allowance for doubtful debts by GHC 110 to GHC 740 (e) Provide for depreciation as follows: Fixtures and fittings GHC 190 and Van GHC 1,400 5 Required: a) Prepare the income statement for the year ending 31st December, 2016 (12 marks) b) Prepare statement of financial position as 31 December 2016 (12 marks) c) Explain four accounting concepts and indicate where they are applicable in the income statement and statement of financial position you have prepare under questions a and b (8 marks) Total = 30 marks