Task 3

Background

You are working with Complete Business Services and handling one of the clients named Fantastic Textiles Ltd. You have been given the following trial balance from the client.

Fantastic Textiles Ltd
Trial Balance
as at 30 June 2020
Account	DR $	CR $
Bank	113,510.00
Accounts Receivable	55,000.00
GST Collected		6,500.00
Sales		389,000.00
Sales Returns	1,200.00
Service & Repairs Fees Income		98,700.00
Discount Allowed	400.00
Freight Outwards Paid	3,550.00
Accounts Payable		56,000.00
GST Paid	540.00
Discount Received		780.00
Freight Inward Paid	1,250.00
Inventory	55,000.00
Cost of Goods Sold	225,000.00
Shop Tools	45,000.00
Accumulated Depreciation - Shop Tools		12,000.00
Furniture/Fixtures & Fittings	45,000.00
Accumulated Depreciation - Furniture/Fixtures & Fittings		17,000.00
Office Equipment	35,000.00
Accumulated Depreciation - Office Equipment		14,000.00
Wages	95,000.00
PAYG		12,000.00
Wages Payable		5,500.00
Electricity	24,580.00
Advertising	35,000.00
Rent	21,150.00
Interest on Short-Term Deposit		1,550.00
Loan		57,000.00
Capital		110,000.00
Drawings	23,500.00
Petty Cash	350.00
Totals	780,030.00	780,030.00

Complete the following:

1. Prepare the closing entries (use narration for every journal entry)
2. Prepare the trading account
3. Prepare profit and loss account
4. Prepare Capital account (Hint: transfer drawings and net profit to the capital account)
5. Highlight the gross profit and net profit figures
6. Prepare a trial balance post-closing the entries and preparing new capital account balance. The trial balance needs to be balanced in terms of debit and credits. You need to Review and check the trial balance ensuring any errors are corrected.

Note: The following templates have been provided to you as being used by this client into their manual accounting system. The client is using uniform templates to maintain their accounts as a part of their organisational Policies and Procedures.