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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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question: prepare the income statement and statement of financial position as of may 31st 2020
![QUESTION TWo
The following Details are from the books of Terraxa Limited
for the year ended May 31 2020
Trial balacne as on May 31 2020
OR
27435
Dividends Paid
4.280
Saks
541,470
Carage Inwards
1,567
Purchases
222.003
Oher Operating Expenses
81.221
Accounts Receivable
87,600
Maintenance
18.289
Accounts Payable
56,769
Machinery at cost
390,720
Vana at cost
314,460
Machiner : Cummulative Depreciation June 1 2019
2.220
Vans: Cummulative Depreciation June 1 2019
72.000
Inventory at cost June 1 2019
18,424
Cash at Bank
374
7% Noles Payable 2030-2032
173,000
Notes payable Interest Paid
6.066
Bad Debts
15,598
Alowance foe Doubtful debts June 1 2019
Common Stooks e 1=Each
Retained Eamings at june1 2019
2,641
55,000
194,925
1.188.026
1,188.025
Additional information
1. The Company's Inventory on May 31 2020 was valued at
Sh. 19404
2. Depreciation is to be charged as follows: Machinery at
30% pa reducing balance and Vans 20% a straight line
3. The amount shown on maintenance includes Sh. 8580
which represents an annual maintenance contract to 31
March 2021
4. Gas charges incured for which Invoices have not yet been
received amount to. Sh.5335
5. Allowance for doubtful debts is to be set at 4% of accounts
receivable
6. The Notes s Payable interest is paid in two annual
instalments and the second installment needs to be
provided for.
7. The Corporation Tax charge on profits for the year is
estimated to be Sh. 3000
Required
Prepare Income Statement for the year ended May
31 2020 and a statement of Financial Position at on](https://content.bartleby.com/qna-images/question/280aad5f-0b8b-4f81-b65b-325bb110c0a2/5e4cd364-afd8-404a-9943-0567d2b79aa1/qidmo0a_thumbnail.jpeg)
Transcribed Image Text:QUESTION TWo
The following Details are from the books of Terraxa Limited
for the year ended May 31 2020
Trial balacne as on May 31 2020
OR
27435
Dividends Paid
4.280
Saks
541,470
Carage Inwards
1,567
Purchases
222.003
Oher Operating Expenses
81.221
Accounts Receivable
87,600
Maintenance
18.289
Accounts Payable
56,769
Machinery at cost
390,720
Vana at cost
314,460
Machiner : Cummulative Depreciation June 1 2019
2.220
Vans: Cummulative Depreciation June 1 2019
72.000
Inventory at cost June 1 2019
18,424
Cash at Bank
374
7% Noles Payable 2030-2032
173,000
Notes payable Interest Paid
6.066
Bad Debts
15,598
Alowance foe Doubtful debts June 1 2019
Common Stooks e 1=Each
Retained Eamings at june1 2019
2,641
55,000
194,925
1.188.026
1,188.025
Additional information
1. The Company's Inventory on May 31 2020 was valued at
Sh. 19404
2. Depreciation is to be charged as follows: Machinery at
30% pa reducing balance and Vans 20% a straight line
3. The amount shown on maintenance includes Sh. 8580
which represents an annual maintenance contract to 31
March 2021
4. Gas charges incured for which Invoices have not yet been
received amount to. Sh.5335
5. Allowance for doubtful debts is to be set at 4% of accounts
receivable
6. The Notes s Payable interest is paid in two annual
instalments and the second installment needs to be
provided for.
7. The Corporation Tax charge on profits for the year is
estimated to be Sh. 3000
Required
Prepare Income Statement for the year ended May
31 2020 and a statement of Financial Position at on
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