The following balances were extracted from the books of Billion Precision for the year ended 31 December 2020. Dr (RM)Cr (RM)Land500000 Building200000 Motor vehicles120000 Plant and machinery70000 Profit b/f as at 01.01.2020 237650Capital 438000 Acc depreciation as at 1.1.2020 : Dr (RM)Cr (RM)Building 60 000Motor vehicles 69250Plant and machinery 40000Returns36004100Revenue 800000Purchases400000 Discounts5000 Carriage Inwards7700 Opening Inventory52000 Provision for bad debts 2000Trade receivables / Trade payable 6600043200Advertising18000 Staff training course4000 Bad Debts12500 Motor Expenses27000 Rental90000 Bank 7600Wages & Salaries126000 17018001701800Additional 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 31 December2020.b. Prepare the Statement of Financial Position for the year ended 31 December2020.

Required financial statements are given below:

Answered: The following balances were extracted…

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

	Dr (RM)	Cr (RM)
Land	500000
Building	200000
Motor vehicles	120000
Plant and machinery	70000
Profit b/f as at 01.01.2020		237650
Capital		438000

Acc depreciation as at 1.1.2020 :

	Dr (RM)	Cr (RM)
Building		60 000
Motor vehicles		69250
Plant and machinery		40000
Returns	3600	4100
Revenue		800000
Purchases	400000
Discounts	5000
Carriage Inwards	7700
Opening Inventory	52000
Provision for bad debts		2000
Trade receivables / Trade payable	66000	43200
Advertising	18000
Staff training course	4000
Bad Debts	12500
Motor Expenses	27000
Rental	90000
Bank		7600
Wages & Salaries	126000
	1701800	1701800

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 31 December
2020.

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

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