FIND & FOUND LTD, currently trades in Products CCT. The company is currently enjoying a tax holiday. Below is the company’s trial balance. Trial Balance of FIND & FOUND LTD as at year ending 31/12/2016   DR CR   GH¢ GH¢ 10% Debentures (2030 – 2035) - 8,600 Bad debts 720 - Bank 9,000 - Building repairs and maintenance 1,440   Carriage inward 1,080   Carriage outwards 1,620   Sale / Purchases 84,000 144,000 Donations received - 864 Trade Debtors/ Creditors 21,600 9,720 Discount 720 936 Electricity company of Ghana (ECG) - 1,080 Electricity Expense 1,440 - Income Surplus 1/1 - 64,440 Investment income - 1,080 Long term Investment-cost 90,000 - Motor Vehicle (Accumulated Depreciation) - 4,320 Motor Vehicle (Cost) 18,000 - Office Equipment (Accumulated Depreciation) - 2,160 Opening Stock 4,320   Office Equipment (Cost) 3,600   Plant (Accumulated Depreciation)   8,640 Plant (Cost) 14,400 - Rent Expense 1,800 - Provision for bad debt 1/1 - 1,512 Rent Income- sublets - 648 Returns 540 1,296 Salaries 1,620 - Sales men commission owing - 816 Salesmen commission 1,080   Sanitation 1,344   Short term Investment 3,240   Staff Debtors 360   SSNIT - 960 Stated Capital - 12,960 Telecommunication expenses 756 - Travelling and Transport 360 - PAYE - 720 KTM TELECOM LTD 564   Water Expenses 1,188 - TOTAL 264,792 264,792   Additional Information Depreciation is to be provided based on this policy             Plant                          20% on Cost            Proportionate             Motor vehicle          10% on Cost            Proportionate            Office equipment     10% on cost            Proportionate All assets have more than 3 yrs. before being fully depreciated. No asset was acquired during the year Interest on debenture is yet to be provided. Debenture was secured on the following date with details as follows.   10% Debenture (2030-2035)                    8,640            1/1/2008 Additional Bad debt of GH¢ 3,000 is to be written off A specific provision of GH¢ 2,000 is to be made                A 15% general provision was to be made on outstanding debts Electricity owing of GH¢ 600 due ECG has not been accounted for. Telecom expense of GH¢ 100 due KTM TELECOM LTD has not been accounted for Closing stock is GH¢15,000 Required 1. Prepare a Trading Profit and loss account for the year ended 31/12/2016 2. Prepare a Statement of Financial Position as at 31/12/2016

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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FIND & FOUND LTD, currently trades in Products CCT. The company is currently enjoying a tax holiday.

Below is the company’s trial balance.

Trial Balance of FIND & FOUND LTD as at year ending 31/12/2016

 

DR

CR

 

GH¢

GH¢

10% Debentures (2030 – 2035)

-

8,600

Bad debts

720

-

Bank

9,000

-

Building repairs and maintenance

1,440

 

Carriage inward

1,080

 

Carriage outwards

1,620

 

Sale / Purchases

84,000

144,000

Donations received

-

864

Trade Debtors/ Creditors

21,600

9,720

Discount

720

936

Electricity company of Ghana (ECG)

-

1,080

Electricity Expense

1,440

-

Income Surplus 1/1

-

64,440

Investment income

-

1,080

Long term Investment-cost

90,000

-

Motor Vehicle (Accumulated Depreciation)

-

4,320

Motor Vehicle (Cost)

18,000

-

Office Equipment (Accumulated Depreciation)

-

2,160

Opening Stock

4,320

 

Office Equipment (Cost)

3,600

 

Plant (Accumulated Depreciation)

 

8,640

Plant (Cost)

14,400

-

Rent Expense

1,800

-

Provision for bad debt 1/1

-

1,512

Rent Income- sublets

-

648

Returns

540

1,296

Salaries

1,620

-

Sales men commission owing

-

816

Salesmen commission

1,080

 

Sanitation

1,344

 

Short term Investment

3,240

 

Staff Debtors

360

 

SSNIT

-

960

Stated Capital

-

12,960

Telecommunication expenses

756

-

Travelling and Transport

360

-

PAYE

-

720

KTM TELECOM LTD

564

 

Water Expenses

1,188

-

TOTAL

264,792

264,792

 

Additional Information

  • Depreciation is to be provided based on this policy

            Plant                          20% on Cost            Proportionate

            Motor vehicle          10% on Cost            Proportionate

           Office equipment     10% on cost            Proportionate

All assets have more than 3 yrs. before being fully depreciated.

No asset was acquired during the year

  • Interest on debenture is yet to be provided. Debenture was secured on the following date with details as follows.

 

10% Debenture (2030-2035)                    8,640            1/1/2008

  • Additional Bad debt of GH¢ 3,000 is to be written off
  • A specific provision of GH¢ 2,000 is to be made

               A 15% general provision was to be made on outstanding debts

  • Electricity owing of GH¢ 600 due ECG has not been accounted for.

Telecom expense of GH¢ 100 due KTM TELECOM LTD has not been accounted for

  • Closing stock is GH¢15,000

Required

1. Prepare a Trading Profit and loss account for the year ended 31/12/2016

2. Prepare a Statement of Financial Position as at 31/12/2016

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