Question 5 The following balances were extracted from the books of Billion Precision for the year ended 31 December 2020. Dr (RM) Cr (RM) Land 500 000 Building 200 000 Motor Vehicles 120 000 Plant & machinery 70 000 Profit b/f as at 01.01.2020 237 650 Capital 438 000 Acc depreciation as at 1.1.2020 Building 60 000 Motor Vehicles 69 250 Plant & machinery 40 000 Returns 3 600 4 100 Revenue 800 000 Purchases 400 000 Discounts 5 000 Carriage inwards 7 700 Opening inventory 52 000 Provision for bad debts 2 000 Trade receivable / Trade payable 66 000 43 200 Advertising 18 000 Staff training cost 4 000 Bad debts 12 500 Motor expenses 27 000 Rental 90 000 Bank 7 600 Wages & Salaries 126 000 Grand Total 1 701 800 1 701 800 Additional information: i. The provision for bad debts should be 4% of trade receivables. ii. Depreciation is to be charged as follows: -Buildings 2% on cost. -Plant and machinery 20% on cost. -Vehicles 25% on cost. iii. The closing inventories is valued at RM57,000. Required: a. Prepare the Statement of Comprehensive Income for the year ended 3 December 2020. b. Prepare the Statement of Financial Position for the year ended 31 December 2020.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question 5
The following balances were extracted from the books of Billion Precision for the year ended 31 December 2020.

	Dr (RM)	Cr (RM)
Land	500 000
Building	200 000
Motor Vehicles	120 000
Plant & machinery	70 000
Profit b/f as at 01.01.2020		237 650
Capital		438 000
Acc depreciation as at 1.1.2020
Building		60 000
Motor Vehicles		69 250
Plant & machinery		40 000
Returns	3 600	4 100
Revenue		800 000
Purchases	400 000
Discounts	5 000
Carriage inwards	7 700
Opening inventory	52 000
Provision for bad debts		2 000
Trade receivable / Trade payable	66 000	43 200
Advertising	18 000
Staff training cost	4 000
Bad debts	12 500
Motor expenses	27 000
Rental	90 000
Bank		7 600
Wages & Salaries	126 000
Grand Total	1 701 800	1 701 800

Additional information:
i. The provision for bad debts should be 4% of trade receivables.

ii. Depreciation is to be charged as follows:
-Buildings 2% on cost.
-Plant and machinery 20% on cost.
-Vehicles 25% on cost.

iii. The closing inventories is valued at RM57,000.

Required:
a. Prepare the Statement of Comprehensive Income for the year ended 3 December 2020.

b. Prepare the Statement of Financial Position for the year ended 31 December 2020.

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