Puan Meera Afendy owns boutique, Cempaka Sari, at SACC Mall. The boutique sells ladies’ clothes and accessories. The following trial balance was extracted from the books of Cempaka Sara as at 31 December 2018.

Debit Credit (RM) (RM) Inventory as at 1 January 2019 40,000 Returns inwards and outwards 4,000 6,000 Carriage inwards 7,000 Duty on purchases 5,600 Carriage outwards 4,400 Purchases and sales 160,000 300,000 Discount received 5,200 6,400 Insurance on purchases 5,400 Commission received 4,600 Shop rental 32,000 Salary 33,000 Salesman commission 2,600 Advertisment expenses 5,000 Allowance for doubtful debts 1,000 Accumulated depreciation - Delivery van 28,000 - Costumes cabinet 12,000 - Office equipment 10,000 Delivery van 70,000 Costumes cabinet 60,000 Office equipment 50,000 Accounts receivable and payable 20,000 40,000 Telephone and electricity bills 10,000 Insurance 8,000 Bad debts 1,000 Cash at bank 50,000 Petty cash 3,000 Loan from TEKUN (10% per annum) 100,000 Drawings 600 Capital 68,800 576,800 576,800

The following adjustment need to be considered:- 

1. The shop rental is RM 4,000 per month. Puan Meera paid rental for 2 months in advance. 

2. The salary for the fashion designer amounting to RM 3,000 was still unpaid. 

3. Interest on a loan from TEKUN for one year was outstanding. 

4. One of the customers was declared bankrupt and unable to settle his debts. The customer still owed RM 6,000. 

5. Provision for doubtful debts on account receivable need to be provided at the rate of 5%. 

6. An annual depreciation is to be provided as follows: Delivery van 20% on cost Costumes cabinet 10% on straight line basis Office equipment 10% on cost 

7. Puan Meera withdrew petty cash of RM 400 and took a dress worth RM 600 for her daughter’s birthday. 

8. Inventory as at 31 December 2018 was RM 32,000. 

By considering the additional information, you are required to prepare: 

(a) Prepare the Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2018

Answer rating: 100% (QA)

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