Instructions: (1) Prepare a profit and loss account for the current accounting year ending 30th June,...

 

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Instructions: (1) Prepare a profit and loss account for the current accounting year ending 30th June, exercising care to include each item of expense listed. (2) Prepare a balance sheet as at 30th June of the current accounting year. 1-3A. Mr M Luqman operates a business known as Model Dry Cleaners. The actual work of dry cleaning is done by another company at wholesale rates. The assets and the liabilities of the business on 1st May of the current year are as follows: Cash, Rs. 1,500;, Debtors, Rs. 200; Supplies, Rs. 90; Equipment. Rs. 4,800; Accumulated Depreciation. Rs. 900; Creditors, Rs. 1,120. Business transactions during May are summarised below. (a) Paid rent for the month. Rs. 160. (b) Purchased supplies on credit, Rs. 40 (c) Paid creditors on account, Rs. 890. (d) Received cash from cash customers for dry cleaning sales, Rs. 1,200. (e) Charged customers for dry cleaning sales on credit, Rs. 570. (f) Received monthly invoice for dry cleaning expense for May (to be paid on 10th June), Rs. 850. (i) Paid the following; wages expense, Rs. 140; truck expense, Rs. 45; utilities expense, Rs. 25; miscellaneous expense, Rs. 30. (j) Purchased an item of equipment on credit, Rs. 70. (k) Paid personal expenses by cheques drawn on the business, Rs. 280, and withdrew Rs. 100 in cash for personal use. (1) Determined by taking an inventory the cost of supplies used during the month, Rs. 10. (m) Estimated depreciation of truck and other equipment for the month, Rs. 80. Instructions: (1) State the liabilities, capital and assets as at 1st May in equation form similar to that shown in this chapter. (2) Record, in tabular form below the equation, the increases and decreases resulting from each transaction, indicating the new balances after ach transaction. Explain the nature of each increase and Instructions: (1) Prepare a profit and loss account for the current accounting year ending 30th June, exercising care to include each item of expense listed. (2) Prepare a balance sheet as at 30th June of the current accounting year. 1-3A. Mr M Luqman operates a business known as Model Dry Cleaners. The actual work of dry cleaning is done by another company at wholesale rates. The assets and the liabilities of the business on 1st May of the current year are as follows: Cash, Rs. 1,500;, Debtors, Rs. 200; Supplies, Rs. 90; Equipment. Rs. 4,800; Accumulated Depreciation. Rs. 900; Creditors, Rs. 1,120. Business transactions during May are summarised below. (a) Paid rent for the month. Rs. 160. (b) Purchased supplies on credit, Rs. 40 (c) Paid creditors on account, Rs. 890. (d) Received cash from cash customers for dry cleaning sales, Rs. 1,200. (e) Charged customers for dry cleaning sales on credit, Rs. 570. (f) Received monthly invoice for dry cleaning expense for May (to be paid on 10th June), Rs. 850. (i) Paid the following; wages expense, Rs. 140; truck expense, Rs. 45; utilities expense, Rs. 25; miscellaneous expense, Rs. 30. (j) Purchased an item of equipment on credit, Rs. 70. (k) Paid personal expenses by cheques drawn on the business, Rs. 280, and withdrew Rs. 100 in cash for personal use. (1) Determined by taking an inventory the cost of supplies used during the month, Rs. 10. (m) Estimated depreciation of truck and other equipment for the month, Rs. 80. Instructions: (1) State the liabilities, capital and assets as at 1st May in equation form similar to that shown in this chapter. (2) Record, in tabular form below the equation, the increases and decreases resulting from each transaction, indicating the new balances after ach transaction. Explain the nature of each increase and

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decrease as well 3 Prepare a Profit and Loss Account for the month of May 4 Prepare a Balance Sheet as at 31st May Solution 1 Equation form as at 1st ... View the full answer