The following trial balance was extracted from the ledger of Juliana at 31December 2020. Juliana Trial Balance as at 31 December 2020 RM RM Land at cost 26,000 Plant at cost 83,000 Accumulated Depreciation at 1 January 2020- Plant 13,000 Office Equipment 33,000 Accumulated Depreciation at 1 January 2020 Office Equipment 8,000 Receivables 198,000 Payables 52,000 Sales 763,000 Purchases 516,000 Returns Inwards 47,000 Discount allowed 4,000 Capital at 1st January 2020 230,000 Drawings 14,000 Provision for doubtful debts at 1 Jauary 2020 23,000 Salaries Expense 44,000 Administration costs 38,000 Bank 75,000 Bad debts written off 77,000 Inventory at 1 January 2020 84,000 1,164,000 1,164,000 Additional information: Closing inventory is RM74,000. Depreciation on plant is charged at 10% per annum on cost. Depreciation on office equipment is charged at 20% per annum using the reducing balance method. Administration costs include insurance prepaid of RM3,000. Salary accrued amount to RM2,000. The allowancefor receivables is to remain at RM23,000. Required: a. Prepare Statement of Comprehensive Income for the year ended 31 December 2020. b. Prepare Statement of Financial Position as at 31 December 2020.
The following trial balance was extracted from the ledger of Juliana at 31December 2020. Juliana Trial Balance as at 31 December 2020 RM RM Land at cost 26,000 Plant at cost 83,000 Accumulated Depreciation at 1 January 2020- Plant 13,000 Office Equipment 33,000 Accumulated Depreciation at 1 January 2020 Office Equipment 8,000 Receivables 198,000 Payables 52,000 Sales 763,000 Purchases 516,000 Returns Inwards 47,000 Discount allowed 4,000 Capital at 1st January 2020 230,000 Drawings 14,000 Provision for doubtful debts at 1 Jauary 2020 23,000 Salaries Expense 44,000 Administration costs 38,000 Bank 75,000 Bad debts written off 77,000 Inventory at 1 January 2020 84,000 1,164,000 1,164,000 Additional information: Closing inventory is RM74,000. Depreciation on plant is charged at 10% per annum on cost. Depreciation on office equipment is charged at 20% per annum using the reducing balance method. Administration costs include insurance prepaid of RM3,000. Salary accrued amount to RM2,000. The allowancefor receivables is to remain at RM23,000. Required: a. Prepare Statement of Comprehensive Income for the year ended 31 December 2020. b. Prepare Statement of Financial Position as at 31 December 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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The following
| Juliana | ||
| Trial Balance as at 31 December 2020 | ||
| RM | RM | |
| Land at cost | 26,000 | |
| Plant at cost | 83,000 | |
| 13,000 | ||
| Office Equipment | 33,000 | |
|
Accumulated Depreciation at 1 January 2020 Office Equipment |
8,000 | |
| Receivables | 198,000 | |
| Payables | 52,000 | |
| Sales | 763,000 | |
| Purchases | 516,000 | |
| Returns Inwards | 47,000 | |
| Discount allowed | 4,000 | |
| Capital at 1st January 2020 | 230,000 | |
| Drawings | 14,000 | |
| Provision for doubtful debts at 1 Jauary 2020 | 23,000 | |
| Salaries Expense | 44,000 | |
| Administration costs | 38,000 | |
| Bank | 75,000 | |
| 77,000 | ||
| Inventory at 1 January 2020 | 84,000 | |
| 1,164,000 | 1,164,000 |
Additional information:
- Closing inventory is RM74,000.
- Depreciation on plant is charged at 10% per annum on cost. Depreciation on office equipment is charged at 20% per annum using the
reducing balance method . - Administration costs include insurance prepaid of RM3,000.
- Salary accrued amount to RM2,000.
- The allowancefor receivables is to remain at RM23,000.
Required:
a. Prepare Statement of Comprehensive Income for the year ended 31 December 2020.
b. Prepare Statement of Financial Position as at 31 December 2020.
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