(b). Fabrics are sold on cash basis while footwear is sold on both cash and credit basis. The following balances were extracted from the books of Mambo Enterprise for the year ended 30h June 2020. DR CR Capital 756,000 Drawings 142,500 Fixtures and fittings (cost ¢160,000) 120,000 Motor vehicle (bought on 1" January, 2020) 480,000 L Purchases: Fabrics 450,000 Footwear 830,000 Sales: Fabrics 600,000 Footwear 1,200,000 Debtors and Creditors 46,500 70,000 Salaries and wages 315,000 Rent and rates 50,000 Motor vehicle expenses 32,500 Electricity 50,000 Cash 22,500 Stock-in-trade (1st July, 2019) Fabrics 32,000 Footwear 50,000 2,631,000 2,631,000 Additional information: (i) Provision for doubtful debts should be created at 10% of debtors. (ii) Stock at 30" June 2020 were: Fabrics ¢96,000, Footwear ¢130,000. (iii) Fixtures and fittings should be depreciated at 10% on cost and Motor vehicle at 20% on cost per annum. (iv) The floor are occupied by the fabric is 12 square metres and that of the footwear is 18 square metres; (v) Expenses are to allocated between the departments on the following basis Expenses Basis Rent and rates: Electricity Floor area Salaries and wages Turnover Motor vehicle expenses: Depreciation of Fixed Assets Equally You are required to prepare: (1)Income Statements in columnar form for each department for the year ended 30h June, 2020.
(b). Fabrics are sold on cash basis while footwear is sold on both cash and credit basis. The following balances were extracted from the books of Mambo Enterprise for the year ended 30h June 2020. DR CR Capital 756,000 Drawings 142,500 Fixtures and fittings (cost ¢160,000) 120,000 Motor vehicle (bought on 1" January, 2020) 480,000 L Purchases: Fabrics 450,000 Footwear 830,000 Sales: Fabrics 600,000 Footwear 1,200,000 Debtors and Creditors 46,500 70,000 Salaries and wages 315,000 Rent and rates 50,000 Motor vehicle expenses 32,500 Electricity 50,000 Cash 22,500 Stock-in-trade (1st July, 2019) Fabrics 32,000 Footwear 50,000 2,631,000 2,631,000 Additional information: (i) Provision for doubtful debts should be created at 10% of debtors. (ii) Stock at 30" June 2020 were: Fabrics ¢96,000, Footwear ¢130,000. (iii) Fixtures and fittings should be depreciated at 10% on cost and Motor vehicle at 20% on cost per annum. (iv) The floor are occupied by the fabric is 12 square metres and that of the footwear is 18 square metres; (v) Expenses are to allocated between the departments on the following basis Expenses Basis Rent and rates: Electricity Floor area Salaries and wages Turnover Motor vehicle expenses: Depreciation of Fixed Assets Equally You are required to prepare: (1)Income Statements in columnar form for each department for the year ended 30h June, 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:(b). Fabrics are sold on cash basis while footwear is sold on both cash and credit basis.
The following balances were extracted from the books of Mambo Enterprise for the
year ended 30h June 2020.
DR
CR
Capital
756,000
Drawings
142,500
Fixtures and fittings (cost ¢160,000)
120,000
Motor vehicle (bought on 1" January, 2020)
480,000
L
Purchases: Fabrics
450,000
Footwear
830,000
Sales:
Fabrics
600,000
Footwear
1,200,000
Debtors and Creditors
46,500
70,000
Salaries and wages
315,000
Rent and rates
50,000
Motor vehicle expenses
32,500
Electricity
50,000
Cash
22,500
Stock-in-trade (1st July, 2019) Fabrics
32,000
Footwear
50,000
2,631,000 2,631,000
Transcribed Image Text:Additional information:
(i)
Provision for doubtful debts should be created at 10% of debtors.
(ii)
Stock at 30" June 2020 were: Fabrics ¢96,000, Footwear ¢130,000.
(iii)
Fixtures and fittings should be depreciated at 10% on cost and Motor vehicle
at 20% on cost per annum.
(iv)
The floor are occupied by the fabric is 12 square metres and that of the
footwear is 18 square metres;
(v)
Expenses are to allocated between the departments on the following basis
Expenses
Basis
Rent and rates: Electricity
Floor area
Salaries and wages
Turnover
Motor vehicle expenses:
Depreciation of Fixed Assets
Equally
You are required to prepare:
(1)Income Statements in columnar form for each department for the year ended 30h
June, 2020.
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