5. The following trial balance was extracted from the books of Fasuha Trading as at 31 December 2020. Particulars Debit Credit RM RM Office equipment Motor vehicles Furniture Accumulated depreciation as at 1 January 2020: Office equipment Motor vehicles Furniture Account receivables and account payables |Capital 6% loan to Rara 12,250 9,150 3,600 2,450 1,373 1,060 3,632 29,608 6,860 2,500 19,110 31,560 215 4,250 1,630 Purchases and sales Discount | Advertising Cash in hand Provision for doubtful debts Commission received 6% loan from Afina Bank (taken from 1 May 2020) Rent Drawings Maintenance and petrol Staff's wages Insurance Cash at bank Carriage inwards Carriage outwards Telephone and electricity Duties on purchases Returns Inventory as at 1 January 2020 175 300 740 8,000 700 1,200 1,900 1,260 4,005 1,000 5,270 210 250 610 915 110 3,415 79,710 79,710 112 TOTAL
5. The following trial balance was extracted from the books of Fasuha Trading as at 31 December 2020. Particulars Debit Credit RM RM Office equipment Motor vehicles Furniture Accumulated depreciation as at 1 January 2020: Office equipment Motor vehicles Furniture Account receivables and account payables |Capital 6% loan to Rara 12,250 9,150 3,600 2,450 1,373 1,060 3,632 29,608 6,860 2,500 19,110 31,560 215 4,250 1,630 Purchases and sales Discount | Advertising Cash in hand Provision for doubtful debts Commission received 6% loan from Afina Bank (taken from 1 May 2020) Rent Drawings Maintenance and petrol Staff's wages Insurance Cash at bank Carriage inwards Carriage outwards Telephone and electricity Duties on purchases Returns Inventory as at 1 January 2020 175 300 740 8,000 700 1,200 1,900 1,260 4,005 1,000 5,270 210 250 610 915 110 3,415 79,710 79,710 112 TOTAL
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Topic Video
Question
Transcribed Image Text:5. The following trial balance was extracted from the books of Fasuha Trading as at 31
December 2020.
Particulars
Debit
Credit
RM
RM
Office equipment
Motor vehicles
Furniture
Accumulated depreciation as at 1 January 2020:
Office equipment
Motor vehicles
Furniture
Account receivables and account payables
Сaptal
12,250
9,150
3,600
2,450
1,373
1,060
3,632
29,608
6,860
6% loan to Rara
2,500
19,110 31,560
175
Purchases and sales
Discount
215
Advertising
Cash in hand
|Provision for doubtful debts
Commission received
| 6% loan from Afina Bank (taken from 1 May 2020)
4,250
1,630
300
740
8,000
700
1,200
1,900
1,260
4,005
1,000
5,270
210
250
Rent
Drawings
Maintenance and petrol
Staff's wages
Insurance
|Cash at bank
Carriage inwards
Carriage outwards
Telephone and electricity
Duties on purchases
Returns
Inventory as at 1 January 2020
610
915
110
112
3,415
79,710 79,710
TОTAL
Transcribed Image Text:The following adjustment are to be taken into account:
a. Inventory as at 31 December 2020 was valued at RM2,600
b. The interest on the loan taken from Afina bank was not recorded in the accounts.
c. Prepaid RM300 of the insurance premiums
d. Prepaid RM125 of the telephone and electricity bills.
e. Depreciation was provided using the rates as follows:
i. Office equipment
ii. Motor vehicles
iii. Furniture
f. Bad debts of RM110 to be written off
20% p.a on carrying value
15% p.a on cost
10% p.a on cost
g. The provision for doubtful debts was to be adjusted to 2.5% of the remaining
account receivables
h. Fasuha had drawn RM150 cash from the business to spend on his son's birthday.
Required:
a) Prepare the Statement Profit or Loss and Other Comprehensive Income for the
year ended 31 December 2020.
b) Prepare the Statement of Financial Position as at 31 December 2020
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education