Questions 7 To 9 - Financial Statements
Questions 7 To 9 - Financial Statements
Questions 7 To 9 - Financial Statements
Question 7: Following balances were extracted from the books of Robert, a sole trader who on 30 th June 2023:
Debit (P) Credit (P)
Returns Inwards 250
Returns outwards 450
Drawings 2 600
Rates and Insurance 4 500
Bank overdraft 2 000
Carriage outwards 300
Capital 20 000
Rent received from sub-letting 1 000
Buildings at cost 30 000
Provision for Depreciation: Buildings 5 000
Commission received 500
Interest on overdraft 1 000
Wages and Salaries 5 000
General Expenses 5 000
Cash in hand 850
Carriage inwards 250
Long term Loan 7 000
Accounts receivable 9 000
Accounts Payable 1 600
Office Furniture at cost 25 000
Provision for Depreciation: Office Furniture 10 000
Discounts allowed 150
Discounts received 450
Stock of Inventory: 1 July 2022 3 500
Purchases 10 500
Bad debts 100
Sales 50 000
98 000 98 000
Additional information: 1. Stock of inventory on 30 June 2023 was P4 500; 2. Carriage inwards accrued was P150; 3. Insurance prepaid
was P250; 4. Commission accrued (not yet received) was P1 000; 5. Rent from sub-letting received in advance was P 200; 6. Additional
Bad debts to be written off P 500; 7. Depreciate Office Furniture by 20% on straight line method and Buildings by 5 % on reducing
balance method, 8.Proprietor has taken goods costing P2 000 for his personal use. The transaction has not yet been recorded in the
books.
Required: 1. Income Statement for the year ended 30th June 2023.2. Statement of Financial Position as at 30 th June 2023.
Question 8: Following balances were extracted from the books of Modise, a sole trader as at 31 st March 2024:
Debit (P) Credit (P)
Office Equipment at cost 30 000
Provision for Depreciation: Office Equipment 10 000
Fittings at cost 25 000
Provision for Depreciation: Fittings 5 000
Purchases 28 000
Sales 65 000
Discounts allowed 600
Discounts received 2 000
Carriage inwards 500
Drawings 4 000
Salaries and wages 6 000
General expenses 1 500
Bank overdraft 2 500
Rent and rates and Insurance 5 500
Advertisement charges 3 000
Long term borrowings 8 000
Capital 20 000
Commission received 700
Accounts receivable 5 000
Stock of Inventory : 1 April 2023 5 500
Carriage outwards 2 500
Accounts Payable 3 000
Interest on overdraft 200
Bad debts 1 000
1
Rent from sub-letting 1 500
Returns inwards 400
Returns outwards 1 000
118 700 118 700
Additional Information: 1. Stock of Inventory on 31 March 2024 was P 5 000; 2. Carriage outwards accrued was P150; 3.Rent from sub-
lettings accrued but not yet received was P500; 4. General Expenses prepaid was P1 000; 5. Commission received in advance
(unearned) was P 300; 6. Additional bad debts to be written off is P500; 7. Depreciate Office Equipment by 5% on Straight-line method
and Fittings also by 5%, but on reducing balancing method.
Required: 1. Income Statement for the year ended 31 March 2024. 2. Statement of Financial Position as at 31 st March 2024.
Question 9: Following Trial Balance was extracted from the books of a sole trader as at 31 December 2023:
P P
Purchases 28 000
Sales 60 000
Cash in hand 1 200
Rent, Rates and Insurance 4 600
Carriage outwards 1 500
Salaries and Wages 7 000
Rent received from sub-letting 800
Bank Overdraft 5 700
Capital 30 000
Accounts receivable 7 000
Long term loan 15 000
Accounts Payable 4 200
Discounts received 1 200
Discounts allowed 400
Returns inwards 2 500
Returns outwards 4 000
Bad Debts 800
Buildings at cost 70 000
Provision for depreciation: Buildings 30 000
Office Equipment at cost 30 000
Provision for depreciation: Office equipment 10 000
Carriage Inwards 500
Commission received 4 000
Opening Inventory: 1 January 2023 8 000
Drawings : 3 000
Interest on Bank overdraft 400
164 900 164 900
Additional Information: 1. Stock of Inventory as at 31 December 2023 was P 7 500; 2. Additional bad debts to be written off is P1 500;
3. Carriage Inwards accrued was P500; 4. Prepaid rates were P600; 5. Commission received in advance was P200; 6. Depreciate
Buildings at 5% on straight-line method and Office Equipment at 10% on reducing balance method; 7. The proprietor had taken goods
costing P1 500 for his personal use, but was not recorded in business books.
Prepare: Income Statement of the business for the year ended 31 December 2023 2. A Statement of Financial Position of the
business as at 31 December 2023.