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Question 2 (22 Marks)

Ms Malaika owns a wholesale clothing business. The trial balance as of June 30, 2017 is provided along with additional information. The additional information includes updated inventory, rent, provision for doubtful debts, prepaid salaries, bad debt write-off, and depreciation rates. The required financial statements are the statement of profit and loss for the year ended June 30, 2017 and the statement of financial position as of June 30, 2017.

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Rax-Nguajandja Kapuire
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37 views1 page

Question 2 (22 Marks)

Ms Malaika owns a wholesale clothing business. The trial balance as of June 30, 2017 is provided along with additional information. The additional information includes updated inventory, rent, provision for doubtful debts, prepaid salaries, bad debt write-off, and depreciation rates. The required financial statements are the statement of profit and loss for the year ended June 30, 2017 and the statement of financial position as of June 30, 2017.

Uploaded by

Rax-Nguajandja Kapuire
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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QUESTION 2 (22 marks)

Ms Malaika has been in the business for some years. The following is the trial balance of her
wholesale clothing business as at 30 June 2017.
Debit Credit
N$ N$
Inventory (stock) as at 1 July 2016 20 000
Sales 349 000
Purchases 245 000
Wages and salaries 47 000
Drawings 10 300
Bad debts 3 500
Equipment at cost 40 000
Depreciation at 1 July 2016 - Equipment 14 000
Vehicle at cost 51 000
Depreciation at 1 July 2016 - Vehicle 6 000
Capital 85 000
Bank 4 700
Account receivables 60 000
Account payables 27 500
Rent 2 000
Provision for bad and doubtful debts at 1 July 2016 2 000
483 500 483 500
Additional information:

1. Inventory (stock) held in the business at 30 June 2017 is valued at N$26 000.
2. At 30 June 2017, the amount of rent for the year should be N$3 500.
3. At 30 June 2017 Ms Malaika wishes to maintain the provision for doubtful debts equal to 5%
of outstanding account receivables balance.
4. Salaries of N$2 000 included in the wages and salaries of N$47000 was for August 2017.
5. A customer who owed the business N$2 000 died on 31 August 2016 and it was agreed
that the amount should be written off as bad debt.
6. Depreciations are to be charged for the year on the vehicle at rate of 10% on reduced
balanced method.
7. Depreciations are to be charged for the year on the equipment at rate of 10 % on cost
and the residual value is estimated at N$10 000 after 5 years.

Required:

1. Prepare Ms Malaika’s statement of profit and loss for the year ended 30 June 2017.
2. Prepare Ms Malaika statement of financial position as at 30 June 2017.

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