IANTS, a sole trader extracted the following trial balance from her books at the close of business on 31st December, 2016: Purchases and sales Inventory 1 January, 2016 Capital 1 January, 2016 Bank overdraft Cash Discounts Returns Carriage outwards Rent and insurance Allowance for doubtful debts Fixtures and fittings Van Accounts receivable and trade payable Drawings Wages and salaries General office expenses Dr GHȻ 61,420 7,940 140 2,480 3,486 3,210 8,870
IANTS, a sole trader extracted the following trial balance from her books at the close of business on 31st December, 2016: Purchases and sales Inventory 1 January, 2016 Capital 1 January, 2016 Bank overdraft Cash Discounts Returns Carriage outwards Rent and insurance Allowance for doubtful debts Fixtures and fittings Van Accounts receivable and trade payable Drawings Wages and salaries General office expenses Dr GHȻ 61,420 7,940 140 2,480 3,486 3,210 8,870
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
GIANTS, a sole trader extracted the following trial balance from her books at the close of business on 31st December, 2016:
Purchases and sales
Inventory 1 January, 2016
Capital 1 January, 2016
Bank overdraft
Cash
Discounts
Returns
Carriage outwards
Rent and insurance
Allowance for doubtful debts
Fixtures and fittings
Van
Accounts receivable and trade payable Drawings
Wages and salaries
General office expenses
Dr GHȻ
61,420 7,940
140 2,480 3,486 3,210 8,870
1,900
5,600 12,418 21,400 39,200
319 168,383
Cr GHȻ
127,245
25,200 2,490
62 1,356
630 11,400
168,383
Additional information:
(a) Inventory 31st December, 2016 GHȻ 6,805
(b) Wages and salaries accrued at 31st December, 2016 GHȻ 3,500; Office expenses
GHȻ 16
(c) Rent prepaid 31st December, 2016 GHȻ 600
(d) Increase in allowance for doubtful debts by GHȻ 110 to GHȻ 740
(e) Provide for depreciation as follows: Fixtures and fittings GHȻ 190 and Van GHȻ
1,400
Required:
a. Prepare statement of financial position as 31 December 2016
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