The following trial balance was extracted from the books of J. Brown as at 31 May 2021. DR CR $ $ Purchases and Sales 65,730 125,910 Stock at June 1, 2020 15,480 - Bank overdraft - 13,050 Capital - 21,600 Cash 270 - Discounts 4,320 2,880 Return inwards 2,430 - Return outwards - 1,710 Carriage outwards 6,480 - Carriage inwards 2,850 - Rent and Rates 5,220 - Provision for bad debts - 1,980 Machinery 5,100 - Van 9,300 - Provision for depreciation on Vans - 3,000 Provision for depreciation on Machinery - 1,500 Accounts Receivable and Payables 35,730 18,180 Drawings 8,640 - Wages and Salaries 26,820 - General office expenses 1,440 - 189,810 189,810 Notes: Closing stock $22,000 Wages and salaries: accrual $900; Office expenses accrued $500 Rent and rates prepaid $800 Increase the provision for bad debts to $2,000 Provision for depreciation Van 10% of cost, and Machinery 15% on the reducing balance method. (See requirements on next page.) Required: 1: Prepare an Income Statement for the year ended May 31, 2021 2: From the information provided, list the items that belong in each of the following categories: a) Non-Current Assets b) Current Assets c) Current Liabilities
The following
DR
CR
$
$
Purchases and Sales
65,730
125,910
Stock at June 1, 2020
15,480
-
Bank overdraft
-
13,050
Capital
-
21,600
Cash
270
-
Discounts
4,320
2,880
Return inwards
2,430
-
Return outwards
-
1,710
Carriage outwards
6,480
-
Carriage inwards
2,850
-
Rent and Rates
5,220
-
Provision for
-
1,980
Machinery
5,100
-
Van
9,300
-
Provision for
-
3,000
Provision for depreciation on Machinery
-
1,500
35,730
18,180
Drawings
8,640
-
Wages and Salaries
26,820
-
General office expenses
1,440
-
189,810
189,810
Notes:
Closing stock $22,000
Wages and salaries: accrual $900; Office expenses accrued $500
Rent and rates prepaid $800
Increase the provision for bad debts to $2,000
Provision for depreciation Van 10% of cost, and Machinery 15% on the
(See requirements on next page.)
Required:
1: Prepare an Income Statement for the year ended May 31, 2021
2: From the information provided, list the items that belong in each of the following categories:
a) Non-Current Assets
b) Current Assets
c) Current Liabilities
Step by step
Solved in 3 steps