ACC106 WORKED EXAMPLE FINANCIAL STATEMENTS QUESTION The following Trial Balance was extracted from the book of Kedai Makan Keluarga, a restaurant business owned by Encik Mustapha as at 31 December 2016:
Capital OE, BS Drawings OE, BS Cash in hand A, BS Bank overdraft L, BS Return inward R, IS Insurance on premises E,IS Salaries of employees E,IS Telephone expenses E,IS Discounts received R, IS Land A, BS Investment A, BS Machinery A, BS Fixtures and fittings A, BS Return outward E,IS Rent revenue R, IS Inventories, 1 January 2016 E,IS Sales R, IS Purchases E,IS Accounts Payable L, BS Accounts Receivable A, BS Prov for depreciation for machinery L, BS Prov for depreciation for fixtures and fittings L, BS Miscellaneous expenses E,IS Utilities expenses E,IS Printing and stationery E,IS
Debit
Credit
RM
RM 145100
2150 10850 4000 3500 6400 13400 1600 3850 61000 23000 53000 24000 1450 5300 8800 93000 62700 18900 12000 10250 7750 4000 2200 1000 ---------289600 ======
----------289600 ======
Additional information is as follows: i.
Inventories as at 31 December 2016 was valued at RM 11000. A, IS & BS
ii.
machinery was depreciated at the rate of 20% per annum by using straight line method. Dep = 20% x 53000 = 10600 IS & BS
iii.
fixtures and fittings were depreciated at the rate of 8% per annum on cost. Dep = 8% x 24000 = 1920 IS & BS
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iv.
Encik Mustapha withdrew RM 2500 cash from the business to buy jewelry for his wife and presents for his children. DRAWINGS deduct from cash. both BS
v.
RM 1900 of rent revenue was not yet received. Accrued revenue. IS & BS
vi.
RM 1300 of the utilities expenses and RM 600 of telephone expenses were still unpaid. accrued expenses IS & BS
vii.
Encik Mustapha took out RM 700 of the business goods for personal use. . DRAWINGS deduct from purchases. IS & BS Required: a. Prepare the Statement of Profit or Loss for Kedai Makan Keluarga for the year ended 31 December 2016. b.
Prepare the Statement of Financial Position (Balance Sheet) for Kedai Makan Keluarga as at 31 December 2016.
IS = Statement of Profit or Loss BS = Statement of Financial Position (Balance Sheet)
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Kedai Makan Keluarga Statement of Profit or Loss for the year ended 31 December 2016 RM Sales Less: return inwards
Cost of Goods Sold Opening inventories Add Purchases Less Drawings Less return outward Cost of goods available for sale Less Closing inventories Gross profit Add income Discount received Rent revenue(5300 +1900) Less expenses Insurance Salaries of employees Telephone(1600 + 600) Miscellaneous expenses Utilities expenses (2200 + 1300) Printing and stationery expenses Depreciation-furniture Depreciation-machinery Net loss
8,800 62,700 700 1,450 --------69,350 11,000
3,850 7,200 6,400 13,400 2,200 4,000 3,500 1,000 1,920 10,600
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RM 93,000 3,500 -------89,500
58,350 31,150
11,050 42,200
(43,020) (820)
Kedai Makan Keluarga Statement of financial Position as at 31 December 2016 Non current Assets Cost RM Land 61,000 Machinery 53,000 Fixtures and fittings 24,000
Acc. Depreciation RM 20,850 9,670
Investments Investments Current assets Inventories Accounts receivable Cash(10850-2500) Accr rent revenue
NBV RM 61,000 32,150 14,330 23,000
RM 11,000 12,000 8,350 1,900
RM
33,250 163730
Financed by Capital
145,100
Less: Net loss /
(820)
Less: Drawings(2150+2500+700)
(5,350) 138,930
Current liabilities Accounts payable Bank overdraft Accr utilities Accr telephone
18,900 4,000 1,300 600
24,800 163730
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