- 14 Marks
Question
Shoema is a sole proprietor who has not kept a complete set of books for his business. He has now asked you to prepare his accounts. The following information is made available to you.
| Account | 31 December 2015 (₦) | 31 December 2014 (₦) |
|---|---|---|
| Plant and machinery | 242,550 | 272,195 |
| Inventories | 116,424 | 132,864 |
| Trade receivables | 87,749 | 100,254 |
| Trade payables | 46,354 | 49,804 |
| Rates paid in advance | – | 2,695 |
| Rent accrued | 7,007 | 1,348 |
| Salary accrued | 6,468 | 8,085 |
Shoema pays all cash received into the bank and makes all payments by cheque. A summary of his bank account for the year is as follows:
| Bank Account | Amount (₦) |
|---|---|
| Balance b/f | 14,122 |
| Cash sales | 897,758 |
| Trade receivables | 439,930 |
| Trade payables | 917,162 |
| Salaries | 143,751 |
| Rent | 40,425 |
| Insurance | 87,641 |
| Rates | 13,475 |
| New machine | 53,900 |
| Drawings | 58,212 |
| Balance c/f | 37,244 |
| Total | 1,351,810 |
Required:
Prepare Shoema’s statement of profit or loss for the year ended December 31, 2015, and statement of financial position as at December 31, 2015.
Answer
i. Shoema – Statement of Profit or Loss for the year ended December 31, 2015
| Particulars | Amount (₦) |
|---|---|
| Revenue | 1,325,183 |
| Cash sales | 897,758 |
| Credit sales (439,930 – 100,254) | 427,425 |
| Cost of Sales | (930,152) |
| Opening inventory | 132,864 |
| Purchases | 913,712 |
| Closing inventory | (116,424) |
| Gross Profit | 395,031 |
| Expenses | (375,574) |
| Rent (40,425 + 5,736) | 46,161 |
| Rates (13,475 – 2,695) | 10,780 |
| Salaries (143,751 – 1,617) | 142,134 |
| Insurance | 87,641 |
| Depreciation on Plant & Machinery (W1) | 83,545 |
| Net Profit for the Year | 19,457 |
ii. Shoema – Statement of Financial Position as at December 31, 2015
| Particulars | Amount (₦) | Amount (₦) |
|---|---|---|
| Non-Current Assets | ||
| Plant & Machinery | 326,095 | |
| Accumulated Depreciation | (83,545) | 242,550 |
| Current Assets | ||
| Inventories | 116,424 | |
| Trade Receivables | 87,749 | |
| Cash at Bank | 37,244 | 241,417 |
| Total Assets | 483,967 | |
| Equity & Liabilities | ||
| Capital | ||
| Opening Capital | 462,893 | |
| Net Profit | 19,457 | |
| Drawings | (58,212) | 424,138 |
| Current Liabilities | ||
| Trade Payables | 46,354 | |
| Rent Accrued | 7,007 | |
| Salary Accrued | 6,468 | 59,829 |
| Total Equity & Liabilities | 483,967 |
- Topic: Accounting from Incomplete Records
- Series: MAY 2017
- Uploader: Kwame Aikins