Twitter Enterprise sells electrical products including washing machines, air conditioners, water heaters and televisions. The following...

 

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Twitter Enterprise sells electrical products including washing machines, air conditioners, water heaters and televisions. The following balances were extracted from the books of Twitter Enterprise as at 31 December 2019, Debit Credit List of Accounts (RM) (RM) Capital Inventories as at 1 January 2019 Freehold Land 363,600 22,500 250,000 96,000 Motor Vehicles Office Equipment Accumulated Depreciation as at 1 January 2019 25,000 Motor Vehicles 38,400 5,890 Ofice Equipment 5% Fixed Deposit 50,000 55,800 2,470 21,500 Bank Cash Accounts Receivables Accounts Payables 36,400 10% Loan from Bank FB 40,000 Purchases Sales Return Inwards Return Outwards 115,600 265,000 150 800 Discounts Received 1,960 Discounts Allowed 570 Insurance on purchase Bank Charges Rental expense 350 1,000 9,600 Stationeries 800 Carriage expenses Salaries Utilities General Expenses Advertising Expenses Commission received Drawings Allowances for Doubtful Debt as at 1 January 2019 4,800 78,000 8,460 8,280 10,200 9,000 580 610 761,660 761,660 Additional information 1. Inventories as at 31 December 2019 were valued at RM28,500 2. The Fixed Deposit account was opened on 1 July 2019 and interest is at 5% per annum. No interest has been received during the year. 3. The owner took cash RM1,000 and goods worth RM8,000 for personal use 4. The loan from Bank FB was taken on 1 January 2019. No interest has been paid on this loan at the end of accounting period. 5. Allowances for Doubtful Debt were to be adjusted to RM645. 6. 25% of carriage expenses were carriage inwards and the remainder were carriage outwards expenses. 7. Depreciation is to be provided as follows: Motor vehicles Office equipment 10% on straight line method 7% on reducing balance method 8. The following adjustments are to be considered for the period: Prepayments RM Accruals RM 2,000 Salaries 100 Utilities Commission received 2,500 500 Stationeries Required: (a) Prepare the Statement of Profit or Loss for the year ended 31 December 2019. (7 marks) (b) Prepare the Statement of Financial Position as at 31 December 2019. (6 marks) (c) Explain the following terms: (i) Business entity (ii) Going concern (iii) Prudence (iv) Materiality (3 marks) (3 marks) (3 marks) (3 marks) Twitter Enterprise sells electrical products including washing machines, air conditioners, water heaters and televisions. The following balances were extracted from the books of Twitter Enterprise as at 31 December 2019, Debit Credit List of Accounts (RM) (RM) Capital Inventories as at 1 January 2019 Freehold Land 363,600 22,500 250,000 96,000 Motor Vehicles Office Equipment Accumulated Depreciation as at 1 January 2019 25,000 Motor Vehicles 38,400 5,890 Ofice Equipment 5% Fixed Deposit 50,000 55,800 2,470 21,500 Bank Cash Accounts Receivables Accounts Payables 36,400 10% Loan from Bank FB 40,000 Purchases Sales Return Inwards Return Outwards 115,600 265,000 150 800 Discounts Received 1,960 Discounts Allowed 570 Insurance on purchase Bank Charges Rental expense 350 1,000 9,600 Stationeries 800 Carriage expenses Salaries Utilities General Expenses Advertising Expenses Commission received Drawings Allowances for Doubtful Debt as at 1 January 2019 4,800 78,000 8,460 8,280 10,200 9,000 580 610 761,660 761,660 Additional information 1. Inventories as at 31 December 2019 were valued at RM28,500 2. The Fixed Deposit account was opened on 1 July 2019 and interest is at 5% per annum. No interest has been received during the year. 3. The owner took cash RM1,000 and goods worth RM8,000 for personal use 4. The loan from Bank FB was taken on 1 January 2019. No interest has been paid on this loan at the end of accounting period. 5. Allowances for Doubtful Debt were to be adjusted to RM645. 6. 25% of carriage expenses were carriage inwards and the remainder were carriage outwards expenses. 7. Depreciation is to be provided as follows: Motor vehicles Office equipment 10% on straight line method 7% on reducing balance method 8. The following adjustments are to be considered for the period: Prepayments RM Accruals RM 2,000 Salaries 100 Utilities Commission received 2,500 500 Stationeries Required: (a) Prepare the Statement of Profit or Loss for the year ended 31 December 2019. (7 marks) (b) Prepare the Statement of Financial Position as at 31 December 2019. (6 marks) (c) Explain the following terms: (i) Business entity (ii) Going concern (iii) Prudence (iv) Materiality (3 marks) (3 marks) (3 marks) (3 marks)

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Preparation of the Statement of Profit Loss for the year ended 31 December 2019 Trading Profit L... View the full answer