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- Sundry Expenses Ghc250 (d) Allowance for receivables to be increased to Ghc2,800 (e) Part of the Premises is sublet at Ghc2,400 per annum (f) Monthly salaries and wages bill Ghc400 (g) Bad debt at 31* December 2019 Ghc600 (h) Loan interest is 5% per annum (i) Provide for depreciation on a straight line method: - Premises 2%; Plant and Machinery 25% - Motor Vehicle 10% G) Write off Preliminary expenses (k) Transfer to general reserves Ghc5,0000 and Ghc5,000 to revenue reserves You are required to: a)Prepare the Income Statement for the year using the vertical format b)Prepare the appropriation Account using vertical format c) looking at the debtors figure and cash in hand would you say the company is overtrading? Give reasons

- Sundry Expenses Ghc250 (d) Allowance for receivables to be increased to Ghc2,800 (e) Part of the Premises is sublet at Ghc2,400 per annum (f) Monthly salaries and wages bill Ghc400 (g) Bad debt at 31* December 2019 Ghc600 (h) Loan interest is 5% per annum (i) Provide for depreciation on a straight line method: - Premises 2%; Plant and Machinery 25% - Motor Vehicle 10% G) Write off Preliminary expenses (k) Transfer to general reserves Ghc5,0000 and Ghc5,000 to revenue reserves You are required to: a)Prepare the Income Statement for the year using the vertical format b)Prepare the appropriation Account using vertical format c) looking at the debtors figure and cash in hand would you say the company is overtrading? Give reasons

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please answer using only the vertical format to answer a and b

Additional Information: a) Inventory at close Ghc12,500 b) Expenses Unpaid: - Motor Expenses Ghc200 - Insurance Ghc450 - Sundry Expenses Ghc400 (c) Prepaid Expenses: - Rates Ghc320 - Sundry Expenses Ghc250 (d) Allowance for receivables to be increased to Ghc2,800 (e) Part of the Premises is sublet at Ghc2,400 per annum (f) Monthly salaries and wages bill Ghc400 (g) Bad debt at 31s* December 2019 Ghc600 (h) Loan interest is 5% per annum (i) Provide for depreciation on a straight line method: - Premises 2%; Plant and Machinery 25% - Motor Vehicle 10% G) Write off Preliminary expenses (k) Transfer to general reserves Ghc5,0000 and Ghc5,000 to revenue reserves You are required to: a)Prepare the Income Statement for the year using the vertical format b)Prepare the appropriation Account using vertical format c) looking at the debtors figure and cash in hand would you say the company is overtrading? Give reasons
Transcribed Image Text:Additional Information: a) Inventory at close Ghc12,500 b) Expenses Unpaid: - Motor Expenses Ghc200 - Insurance Ghc450 - Sundry Expenses Ghc400 (c) Prepaid Expenses: - Rates Ghc320 - Sundry Expenses Ghc250 (d) Allowance for receivables to be increased to Ghc2,800 (e) Part of the Premises is sublet at Ghc2,400 per annum (f) Monthly salaries and wages bill Ghc400 (g) Bad debt at 31s* December 2019 Ghc600 (h) Loan interest is 5% per annum (i) Provide for depreciation on a straight line method: - Premises 2%; Plant and Machinery 25% - Motor Vehicle 10% G) Write off Preliminary expenses (k) Transfer to general reserves Ghc5,0000 and Ghc5,000 to revenue reserves You are required to: a)Prepare the Income Statement for the year using the vertical format b)Prepare the appropriation Account using vertical format c) looking at the debtors figure and cash in hand would you say the company is overtrading? Give reasons
The following Tria! Balance was extracted from the books of Johnson Ghana Ltd as at 31* December 2019. Dr Cr GHC GHC Issued and fully paid 20,000 ordinary shares of Ghc1.00 each 20,000 Share Premium 10,000 General Reserves 8,000 Income statement 3,000 Salaries 5,000 Discounts 200 400 Carriage inwards 160 Purchases and Sales 45,000 91,740 Opening Inventory 8,000 Carriage Outwards 560 Loan 24,000 Interest on loan 1,000 Allowance for receivables 2,000 Preliminary Expenses 12,000 Motor Vehicle expenses 1,800 Directors Salaries 6,000 Repairs to Premises 250 Rates 1,600 Premises at Cost 20,000 Motor Vehicles at cost 23,000 Plant and Machinery at cost 25,000 Provision for depreciation - Plant and Machinery 2,500 Debtors and Creditors 12,390 8,000 Sundry Expenses 3,500 Cash in Hand 300 Cash at Hand 4,000 Returns 240 360 170,000 170,000
Transcribed Image Text:The following Tria! Balance was extracted from the books of Johnson Ghana Ltd as at 31* December 2019. Dr Cr GHC GHC Issued and fully paid 20,000 ordinary shares of Ghc1.00 each 20,000 Share Premium 10,000 General Reserves 8,000 Income statement 3,000 Salaries 5,000 Discounts 200 400 Carriage inwards 160 Purchases and Sales 45,000 91,740 Opening Inventory 8,000 Carriage Outwards 560 Loan 24,000 Interest on loan 1,000 Allowance for receivables 2,000 Preliminary Expenses 12,000 Motor Vehicle expenses 1,800 Directors Salaries 6,000 Repairs to Premises 250 Rates 1,600 Premises at Cost 20,000 Motor Vehicles at cost 23,000 Plant and Machinery at cost 25,000 Provision for depreciation - Plant and Machinery 2,500 Debtors and Creditors 12,390 8,000 Sundry Expenses 3,500 Cash in Hand 300 Cash at Hand 4,000 Returns 240 360 170,000 170,000
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