GIANTS, a sole trader extracted the following trial balance from her books at the close of business on 31st December, 2016: Dr Cr GHȻ GHȻ Purchases and sales 61,420 127,245 Inventory 1 January, 2016 7,940 Capital 1 January, 2016 25,200 Bank overdraft 2,490 Cash 140 Discounts 2,480 62 Returns 3,486 1,356 Carriage outwards 3,210 Rent and insurance 8,870 Allowance for doubtful debts 630 Fixtures and fittings 1,900 Van 5,600 Accounts receivable and trade payable 12,418 11,400 Drawings 21,400 Wages and salaries 39,200 General office expenses 319 168,383 168,383 Additional information: (a) Inventory 31st December, 2016 GHȻ 6,805 (b) Wages and salaries accrued at 31st December, 2016 GHȻ 3,500; Office expenses GHȻ 16 (c) Rent prepaid 31st December, 2016 GHȻ 600 (d) Increase in allowance for doubtful debts by GHȻ 110 to GHȻ 740 (e) Provide for depreciation as follows: Fixtures and fittings GHȻ 190 and Van GHȻ 1,400 5 Required: a) Prepare the income statement for the year ending 31st December, 2016 b) Prepare statement of financial position as 31 December 2016 c) Explain four accounting concepts and indicate where they are applicable in the income statement and statement of financial position you have prepare under questions a and b
GIANTS, a sole trader extracted the following
Dr Cr
GHȻ GHȻ
Purchases and sales 61,420 127,245
Inventory 1 January, 2016 7,940
Capital 1 January, 2016 25,200
Bank overdraft 2,490
Cash 140
Discounts 2,480 62
Returns 3,486 1,356
Carriage outwards 3,210
Rent and insurance 8,870
Allowance for doubtful debts 630
Fixtures and fittings 1,900
Van 5,600
Accounts receivable and trade payable 12,418 11,400
Drawings 21,400
Wages and salaries 39,200
General office expenses 319
168,383 168,383
Additional information:
(a) Inventory 31st December, 2016 GHȻ 6,805
(b) Wages and salaries accrued at 31st December, 2016 GHȻ 3,500; Office expenses GHȻ 16
(c) Rent prepaid 31st December, 2016 GHȻ 600
(d) Increase in allowance for doubtful debts by GHȻ 110 to GHȻ 740
(e) Provide for depreciation as follows: Fixtures and fittings GHȻ 190 and Van GHȻ 1,400 5
Required:
a) Prepare the income statement for the year ending 31st December, 2016
b) Prepare
c) Explain four accounting concepts and indicate where they are applicable in the income statement and statement of financial position you have prepare under questions a and b
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