Kamali Gordon is a retailer in Jamaica who had not kept a full set of books....

 

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Kamali Gordon is a retailer in Jamaica who had not kept a full set of books. The following is a summary of his bank statement for the year ended June 30, 2019. Bank Statement Summary Balance brought forward July 1, 2018 Payments to creditors Overdraft interest Credit card (net) Drawings Rent Rental income Cash sales Insurance. Debtors Salaries Cash purchases Electricity Water Telephone Employers' statutory contributions. Office supplies Loan interest Loan principal Additional capital Balance carried forward June 30, 2019 Debit $ 6,820 416, 800 2,510 10,000 195,000 55,000 350,000 540, 100 48, 136 7,625 8,250 24,000 31, 680 4,000 20,000 249, 139 1,969,060 ========= Credit $ 122, 010 2,000 1,465,190 329,860 50,000 1,969, 060 ========= The amount of cash received from cash sales were all paid into the bank with the exception of: $ 8,000 paid for personal expenses $10,000 paid for legal fees Kamali Gordon keeps a cash float of $2000 at his retail store. The loan interest was paid to her sister, Camalia Gordon. Camalia lent Kamali $100,000 on July 1, 2017 at a rate of interest of 10% per annum. The interest is being calculated on a reducing balance basis. The interest is to be paid half-yearly on December 31 and June 30. No interest was outstanding on July 1, 2018. The principal is being paid equally over a 5 year period on January 1, each year. The first principal payment was made on January 1, 2018 and the second principal payment was made on January 1, 2019. Kamali Gordon also accepts credit card payments from customers for the sale. of goods. Credit card companies charge a commission of 2% and remit the net amount to Kamali Gordon. Discounts received from trade creditors amounted to $4,600 and those allowed to debtors were $8,750. Kamali Gordon grants a credit period of 15 days to trade debtors. The closing debtors balance includes a debt of $2,000 from Monica James who migrated to Switzerland. The debt is now outstanding for 1 year and 4 months. Another debtor, Samantha Hill, is experiencing temporary financial difficulties and is unable to pay her debt of $500. The debt is 150 days overdue. Kamali Gordon lease stipulates a rental payment of $15,000 per month. No rental payment was outstanding or prepaid at the beginning of the financial year on July 1, 2018. Kamali Gordon sublet the premises to his cousin Andrew Foster on May 1, 2019 for a monthly rental of $2,000. A lawsuit for $200,000 was filed by Food Distributors Limited, a supplier, on May 15, 2019. The supplier is claiming damages arising out of an alleged breach of contract for the sale of goods. The attorney for Kamali Gordon is of the opinion that the plaintiff's claim is unlikely to succeed. On September 15, 2019 Kamali Gordon successfully negotiated a loan for $500,000 from Trinidad Finance Limited to build his own store on land that he owns. Furniture costing $10,000 was sold on June 30, 2019 to Belinda Brown for $8,000. The accumulated depreciation on the furniture disposed of was $3,000. No furniture was acquired during the financial year ended June 30, 2019. Depreciation is being provided on the straight line basis at a rate of 10% annum on cost. per Stock at cost Trade debtors Accrued utilities Furniture (at cost) Accumulated depreciation Trade creditors Credit card receivables (net) June 30, 2018 $ 221, 600 31,700 1,800 100,000 20,000 30,560 1,470 June 30, 2019 $ 105,800 35,000 2,200 90,000 27,000 26, 200 2,744 Stocks are valued at cost or net realizable value, whichever is lower. The accounts. are prepared. under the historical cost convention. All amounts are stated in Jamaican dollars. Required: (a) An Income Statement for the year ended June 30, 2019. (b) A Balance Sheet as at June 30, 2019. (c) A Statement of Cash Flows for the year ended June 30, 2019. (d) Notes to the Financial Statements for the year ended June 30, 2019. Kamali Gordon is a retailer in Jamaica who had not kept a full set of books. The following is a summary of his bank statement for the year ended June 30, 2019. Bank Statement Summary Balance brought forward July 1, 2018 Payments to creditors Overdraft interest Credit card (net) Drawings Rent Rental income Cash sales Insurance. Debtors Salaries Cash purchases Electricity Water Telephone Employers' statutory contributions. Office supplies Loan interest Loan principal Additional capital Balance carried forward June 30, 2019 Debit $ 6,820 416, 800 2,510 10,000 195,000 55,000 350,000 540, 100 48, 136 7,625 8,250 24,000 31, 680 4,000 20,000 249, 139 1,969,060 ========= Credit $ 122, 010 2,000 1,465,190 329,860 50,000 1,969, 060 ========= The amount of cash received from cash sales were all paid into the bank with the exception of: $ 8,000 paid for personal expenses $10,000 paid for legal fees Kamali Gordon keeps a cash float of $2000 at his retail store. The loan interest was paid to her sister, Camalia Gordon. Camalia lent Kamali $100,000 on July 1, 2017 at a rate of interest of 10% per annum. The interest is being calculated on a reducing balance basis. The interest is to be paid half-yearly on December 31 and June 30. No interest was outstanding on July 1, 2018. The principal is being paid equally over a 5 year period on January 1, each year. The first principal payment was made on January 1, 2018 and the second principal payment was made on January 1, 2019. Kamali Gordon also accepts credit card payments from customers for the sale. of goods. Credit card companies charge a commission of 2% and remit the net amount to Kamali Gordon. Discounts received from trade creditors amounted to $4,600 and those allowed to debtors were $8,750. Kamali Gordon grants a credit period of 15 days to trade debtors. The closing debtors balance includes a debt of $2,000 from Monica James who migrated to Switzerland. The debt is now outstanding for 1 year and 4 months. Another debtor, Samantha Hill, is experiencing temporary financial difficulties and is unable to pay her debt of $500. The debt is 150 days overdue. Kamali Gordon lease stipulates a rental payment of $15,000 per month. No rental payment was outstanding or prepaid at the beginning of the financial year on July 1, 2018. Kamali Gordon sublet the premises to his cousin Andrew Foster on May 1, 2019 for a monthly rental of $2,000. A lawsuit for $200,000 was filed by Food Distributors Limited, a supplier, on May 15, 2019. The supplier is claiming damages arising out of an alleged breach of contract for the sale of goods. The attorney for Kamali Gordon is of the opinion that the plaintiff's claim is unlikely to succeed. On September 15, 2019 Kamali Gordon successfully negotiated a loan for $500,000 from Trinidad Finance Limited to build his own store on land that he owns. Furniture costing $10,000 was sold on June 30, 2019 to Belinda Brown for $8,000. The accumulated depreciation on the furniture disposed of was $3,000. No furniture was acquired during the financial year ended June 30, 2019. Depreciation is being provided on the straight line basis at a rate of 10% annum on cost. per Stock at cost Trade debtors Accrued utilities Furniture (at cost) Accumulated depreciation Trade creditors Credit card receivables (net) June 30, 2018 $ 221, 600 31,700 1,800 100,000 20,000 30,560 1,470 June 30, 2019 $ 105,800 35,000 2,200 90,000 27,000 26, 200 2,744 Stocks are valued at cost or net realizable value, whichever is lower. The accounts. are prepared. under the historical cost convention. All amounts are stated in Jamaican dollars. Required: (a) An Income Statement for the year ended June 30, 2019. (b) A Balance Sheet as at June 30, 2019. (c) A Statement of Cash Flows for the year ended June 30, 2019. (d) Notes to the Financial Statements for the year ended June 30, 2019.

Answer rating: 100% (QA)

a Income Statement for the year ended June 30 2019 Sales including credit card sales net of commission 1465190 7625 8000 10000 1454815 Cost of goods sold using stock at cost 221600 105800 115800 Gross ... View the full answer