Question 2 Adiza is sole trader who does not keep a full double entry system of bookkeeping. However, she has been able to furnish you with the following information on July 31st 2018. 31/07/2018 31/07/2017 GH¢ GH¢ Trade receivables 475,600 286,000 Trade payables 527,400 545,000 Travelling and transport expenses owing 213,000 182,000 Inventory 116,310 175,000 Furniture and fittings 893,000 528,000 Delivery van 1,123,000 1,300,000 Prepaid advertising 92,000 87,200 Rent owing 588,000 411,600 Adiza pays all cash received into the bank and all payments are made by cheque. Below is a summary of the business bank transactions: GH¢ Bank balance (31/07/17) 187,500 Cash from customers 872,000 Sales 1,900,000 2,959,500 Payment to creditors 874,850 Rent 590,000 Advertising 165,000 Travelling and transport expense 237,000 Furniture and fittings 460,000 Salaries and wages 218,000 Distribution expense 72,000 Bank charges 28,000 Balance at bank (31/7/18) 314,650 2,959,500 Discount of GH¢43,100 has been allowed on the receipts from customers and GH¢58,900 has been deducted from the payments to creditors. Adiza charged some of her customers GH¢29,000 for delaying their payments. You are required to prepare: a) Income statement for the year ended 31/7/18 b) A statement of financial position as at that date.
Bad Debts
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 2
Adiza is sole trader who does not keep a full double entry system of bookkeeping. However, she has been able to furnish you with the following information on July 31st 2018.
31/07/2018 31/07/2017
GH¢ GH¢
Trade receivables 475,600 286,000
Trade payables 527,400 545,000
Travelling and transport expenses owing 213,000 182,000
Inventory 116,310 175,000
Furniture and fittings 893,000 528,000
Delivery van 1,123,000 1,300,000
Prepaid advertising 92,000 87,200
Rent owing 588,000 411,600
Adiza pays all cash received into the bank and all payments are made by cheque. Below is a summary of the business bank transactions:
GH¢
Bank balance (31/07/17) 187,500
Cash from customers 872,000
Sales 1,900,000
2,959,500
Payment to creditors 874,850
Rent 590,000
Advertising 165,000
Travelling and transport expense 237,000
Furniture and fittings 460,000
Salaries and wages 218,000
Distribution expense 72,000
Bank charges 28,000
Balance at bank (31/7/18) 314,650
2,959,500
Discount of GH¢43,100 has been allowed on the receipts from customers and GH¢58,900 has been deducted from the payments to creditors. Adiza charged some of her customers GH¢29,000 for delaying their payments.
You are required to prepare:
a) Income statement for the year ended 31/7/18
b) A statement of financial position as at that date.
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