Although Deborah Adefowope has run a small business for many years, she has never kept adequate accounting records. However, a need to obtain a bank loan for the expansion of the business has necessitated the preparation of ‘final’ accounts for the year ended 31 August 2009. As a result, the following information has been obtained after much careful research: 1. Deborah Adefowope’s business assets and liabilities are as follows: As at 1/09/08 31/08/08 Stock in trade GHS8,600 G 800 Debtors for sales 3,900 4,300 Creditors for purchases 7,400 8,900 Rent prepaid 300 420
Although Deborah Adefowope has run a small business for many years, she has never kept adequate accounting records. However, a need to obtain a bank loan for the expansion of the business has necessitated the preparation of ‘
2009.
As a result, the following information has been obtained after much careful research:
1. Deborah Adefowope’s business assets and liabilities are as follows:
As at
1/09/08 31/08/08
Stock in trade GHS8,600 G 800
Debtors for sales 3,900 4,300
Creditors for purchases 7,400 8,900
Rent prepaid 300 420
Electricity accrued due 210 160
Balance at bank 2,300 1,650
Cash in hand 360 330
2. All takings have been banked after deducting the following payments:
Cash drawings – Deborah Adefowope has not kept a record of cash drawings,
but suggests these will be in the region of GHS8,000
Casual labour 1,200
Purchase of goods for resale 1,800
Note: takings have been the source of all amounts banked.
3. Bank payments during the year ended 31 August 2009 have been summarised as follows:
Purchases 101,500
Rent 5,040
Electricity 1,390
Delivery costs (to customers) 3,000
Casual labour 6,620
4. It has been established that a gross profit of 331/3% on cost has been obtained on all the goods sold
5. Despite her apparent lack of practice accounting records, Deborah is able to confirm that she has taken out of the business during the year under review goods for her own use costing GHS600.
Required:
a. Prepare a computation of total purchases for the year ended 31 August, 2009
b. Prepare an income statement for the year ended 31 August 2009 and a
financial position
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