The following list of balances was extracted from the books of Kai Jordan at 31 December 2020, the sole trader’s year end date. The bookkeeper was unable to extract the figure for the Capital account before catching the flu and having to take sick leave. However, the bookkeeper assured that all the other account balances are correct, which means that extracting trial balance will be able to solve the 'missing' Capital account balance. Capital ? Accounts payables 89,244 Accounts receivables 102,432 Accruals 14,136 Bad debts expense 17,076 Bank 26,952 Carriage in 6,624 Carriage out 8,544 Closing stock 53,880 Commissions received 1,824 Depreciation expense 79,824 Discounts allowed 22,380 Discounts received 9,300 Drawings 90,000 Equipment 540,000 Insurance 21,024 Interest expense 8,520 Loan 150,000 Motor Vehicles 180,000 Opening stock 47,700 Other payables 7,920 Prepayments 6,384 Provision for depreciation - Equipment 162,000 Provision for depreciation - Motor Vehicles 72,000 Provision for doubtful debts 1,140 Purchases 594,960 Returns in 3,096 Returns out 4,020 Sales 853,740 Telephone 24,792 Water rates 15,540 The following considerations are to be taken into account for the yearend financial statements: An accrual of $450 is to be included for water rates The insurance expense includes a prepayment of $1,000 Depreciation for the month of December was omitted from the list. It is to be included in the financial statements as follows: Equipment $2,750 Motor vehicles $1,800 Required Prepare the Income Statement for the year ended 31 December 2020. Prepare the Balance Sheet as at 31 December 2020.

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 list of balances was extracted from the books of Kai Jordan at 31 December 2020, the sole trader’s year end date. The bookkeeper was unable to extract the figure for the Capital account before catching the flu and having to take sick leave. However, the bookkeeper assured that all the other account balances are correct, which means that extracting trial balance will be able to solve the 'missing' Capital account balance.

Capital	?
Accounts payables	89,244
Accounts receivables	102,432
Accruals	14,136
Bad debts expense	17,076
Bank	26,952
Carriage in	6,624
Carriage out	8,544
Closing stock	53,880
Commissions received	1,824
Depreciation expense	79,824
Discounts allowed	22,380
Discounts received	9,300
Drawings	90,000
Equipment	540,000
Insurance	21,024
Interest expense	8,520
Loan	150,000
Motor Vehicles	180,000
Opening stock	47,700
Other payables	7,920
Prepayments	6,384
Provision for depreciation - Equipment	162,000
Provision for depreciation - Motor Vehicles	72,000
Provision for doubtful debts	1,140
Purchases	594,960
Returns in	3,096
Returns out	4,020
Sales	853,740
Telephone	24,792
Water rates	15,540

The following considerations are to be taken into account for the yearend financial statements:

An accrual of $450 is to be included for water rates
The insurance expense includes a prepayment of $1,000
Depreciation for the month of December was omitted from the list. It is to be included in the financial statements as follows:
- Equipment $2,750
- Motor vehicles $1,800

Required

Prepare the Income Statement for the year ended 31 December 2020.
Prepare the Balance Sheet as at 31 December 2020.

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