Prepare the Income Statement for the year ending December

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Reference no: EM132339176

Accounting Questions -

Question 1 - The following trial balance has been extracted from the ledger of Hensen, a sole trader as at 31 December 2016, end of his most recent financial year.

Hensen Trial Balance as at 31 December 2016	Debit (RM)	Credit (RM)
Property ( at cost)	150,000
Equipment ( at cost)	87,500
Provision for depreciation (as at 1 January 2016)
Property		15,000
Equipment		35,000
Stock, as at 1 January 2016	15,000
Purchases	359,600
Sales		485,000
Discount allowed and received	3,370	4,420
Wages and salaries	52,360
Bad debts	1,720
Loan interest	1,560
Carriage outward	8,310
Other operating expenses	38,800
Trade receivable	46,200
Trade payable		33,600
Provision for doubtful debts		280
Cash on hand	250
Bank overdraft		14,500
Drawings	28,930
13% Loan		12,000
Capital, as at 1 January 2016		193,800
	793,600	793,600

Additional information as at 31 December 2016 is available:

a. Stock as at 31 December 2016 was valued at RM36,000.

b. Depreciation for the year ending 31 December 2016 has yet to be provided as follows:

Property - 1% using straight line method
Equipment - 15% using reducing balance method

c. Wages and salaries are accrued by RM250.

d. Other operating expenses include certain expenses prepaid by RM600 and accrued by RM400.

e. Provision for bad debts is to be adjusted to 0.5% (0.005) of trade receivable as at 31 December 2016.

f. Purchase includes goods valued at RM3,200 which were withdrawn by Mr Hensen for his personal use.

g. A provision is to be made for loan interest.

Required - Prepare the Income Statement for the year ending 31 December 2016 and a Statement of Financial Position as at that date.

Question 2 - The bookkeeper of Mark Manufacturing provides you with the following trial balance and information.

Trial balance as at 31 December 2016
	RM	RM
Purchases of raw materials	320,000
Fuel and light	31,000
Administration salaries	22,000
Factory wages	40,000
Carriage outwards for finished goods	3,000
Rent and business rates	24,000
Sales		450,000
Returns inward	5,000
General office expenses	8,000
Repairs to plant and machinery	5,000
Inventory at 1 January 2016: Raw materials Work-in-progress Finished goods	25,000 13,000 25,000
Sundry accounts payable		32,000
Capital		612,000
Freehold premises	450,000
Plant and machinery	90,000
Accounts receivable	30,000
Accumulated depreciation on plant and machinery		12,000
Cash in hand	15,000
	1,106,000	1,106,000

Additional information:

i. Depreciation on plant and machinery is 10% - straight-line method.

ii. Closing inventories at 31 December 2016.

	RM
Raw materials	30,000
Work -in-progress	10,000
Finished goods	36,000

iii. Allocate 80% of fuel and light and 75% of rent and rates to manufacturing.

iv. RM3,000 outstanding for fuel and light.

v. Rent and business rates paid in advance: RM6,000.

Required: Prepare the Manufacturing Account and Income Statement for the year ended 31 December 2016.

Reference no: EM132339176

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