Adam owns a small business selling home electronics. Below is the company's unadjusted trial balance dated December 31, 2020. Trial Balance Account Name Debit S Credit S Sales Sales Return 20,400 115,200 Opening inventory Purchases 302,400 Purchases return Non-Current assets at cost: 180,000 Freehold property Equipment 57,600 Motor Vehicles 33,600 Accumulated depreciation on: Equipment 14,400 Motor vehicles 12,000 Salaries and wages 16,800 Insurance 7,200 Advertising expenses 10,800 3,600 Motor expenses Loan interest 9,600 Receivables 86,400 Allowances for receivables 4,800 67,200 Payables Cash at bank 373,200 120,000 Bank loan Capital 192.000 1,216,800 1,216,800 Additional information is provided for use in preparing the company's adjustments: 1. Closing inventory is valued at $78,000. 2. Equipment is depreciated by 25% on straight line basis. 3. Motor vehicles are depreciated by 30% on reducing balance basis. 4. Accrued wages at the end of 2017 amount to $3,120. 5. On 1 April 2017 Adam paid $3,600 for insurance which was valid until 31" March 2018. 6. Irrecoverable receivables of $1,920 need to be write off. 7. Adam decides to increase allowances for receivables to $6,000. 8. Adam has taken goods worth $18,000 for his own use. Required: 1. Prepare Adam's income statement for the year ended December 31, 2020. 2. Prepare Adam's balance sheet as at December 31, 2020. 768,000 38,400
Adam owns a small business selling home electronics. Below is the company's unadjusted trial balance dated December 31, 2020. Trial Balance Account Name Debit S Credit S Sales Sales Return 20,400 115,200 Opening inventory Purchases 302,400 Purchases return Non-Current assets at cost: 180,000 Freehold property Equipment 57,600 Motor Vehicles 33,600 Accumulated depreciation on: Equipment 14,400 Motor vehicles 12,000 Salaries and wages 16,800 Insurance 7,200 Advertising expenses 10,800 3,600 Motor expenses Loan interest 9,600 Receivables 86,400 Allowances for receivables 4,800 67,200 Payables Cash at bank 373,200 120,000 Bank loan Capital 192.000 1,216,800 1,216,800 Additional information is provided for use in preparing the company's adjustments: 1. Closing inventory is valued at $78,000. 2. Equipment is depreciated by 25% on straight line basis. 3. Motor vehicles are depreciated by 30% on reducing balance basis. 4. Accrued wages at the end of 2017 amount to $3,120. 5. On 1 April 2017 Adam paid $3,600 for insurance which was valid until 31" March 2018. 6. Irrecoverable receivables of $1,920 need to be write off. 7. Adam decides to increase allowances for receivables to $6,000. 8. Adam has taken goods worth $18,000 for his own use. Required: 1. Prepare Adam's income statement for the year ended December 31, 2020. 2. Prepare Adam's balance sheet as at December 31, 2020. 768,000 38,400
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Adam owns a small business selling home electronics. Below is the company's unadjusted
trial balance dated December 31, 2020.
Trial Balance
Account Name
Debit S
Credit S
768,000
Sales
Sales Return
20,400
115,200
Opening inventory
Purchases
302,400
Purchases return
38,400
Non-Current assets at cost:
180,000
Freehold property
Equipment
57,600
Motor Vehicles
33,600
Accumulated depreciation on:
Equipment
14,400
Motor vehicles
12,000
16,800
Salaries and wages
Insurance
7,200
Advertising expenses
10,800
3,600
Motor expenses
Loan interest
9,600
Receivables
86,400
Allowances for receivables
Payables
4,800
67,200
Cash at bank
373,200
120,000
Bank loan
Capital
192,000
1,216,800
1,216,800
Additional information is provided for use in preparing the company's adjustments:
1. Closing inventory is valued at $78,000.
2. Equipment is depreciated by 25% on straight line basis.
3. Motor vehicles are depreciated by 30% on reducing balance basis.
4. Accrued wages at the end of 2017 amount to $3,120.
5. On 1 April 2017 Adam paid $3,600 for insurance which was valid until 31" March
2018.
6. Irrecoverable receivables of $1,920 need to be write off.
7. Adam decides to increase allowances for receivables to $6,000.
8. Adam has taken goods worth $18,000 for his own use.
Required:
1. Prepare Adam's income statement for the year ended December 31, 2020.
2. Prepare Adam's balance sheet as at December 31", 2020.
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