The trial balance below was extracted from Ssalongo and Sons

Hardware Enterprises for the year ended 31 December, 2021.

Account title: Debit Credit

Shs '000' Shs '000'

Capital 287,000

Inventory as at 1 January, 2021 142,109

Account receivables & payables 94,000 89,350

Purchases & sales 467,000 715,000

Discounts 7,780 10,600

Drawings 12,000

Salaries & wages 45,595

Trading license 3,200

Electricity 16,750

Carriage outwards 63,200

Delivery trucks at cost 148,000

Furniture & fittings at cost 15,240

Rent 19,200

Accumulated depreciation as at 1 January, 2021:

Delivery truck 59,200

Furniture 1,524

Retained earnings as at 1 January, 2021 69,000

Cash & bank 59,600

Total 1,162,674 1,162,674

Additional information:

1. Closing inventory as at 31 December, 2021 was valued at Shs 76

Million.

2. A customer deposited a total of Shs 15 million on the businesses

Bank account for building materials on 1 December, 2021. The

materials had not been picked by 31 December, 2021 because

construction had not yet commenced.

3. Casual workers' wages of Shs 4,405,000 were outstanding by the

end of the year.

4. The trading license was paid to cover the period 1 October, 2021

to 30 September, 2022.

5. Ssalongo decided to write off a debt worth Shs 3.4 million for a

customer who could not be traced for the last 3 years and to

create a provision for doubtful debts to 5% of the remaining

receivables.

6. 20 pieces of iron bars each costing Shs 65,000 were stolen from

the yard during the year.

7. The business depreciates non-current assets at cost.

Non-current asset: Depreciation rate

Delivery truck 20%

Furniture & fittings 5%

Required:

Prepare for Ssalongo and Sons Hardware Enterprises:

(i) Statement of profit or loss for the year ended 31

December, 2021.

(9 marks)

(ii) Statement of financial position as at 31 December, 2021.

(7 marks)

Answer rating: 100% (QA)

i Statement of Profit or Loss for the Year Ended 31 December 2021 Shs 000 Sales 715000 Less Cost of ... View the full answer