FA2 Managing Financial Records

Chap 10 EXERCISE
Lecturer: Christine Colon, ACCA

Name:
Group: Date:

KKONG

The following balances were extracted from the records of K Kong at the end of his first year of
trading:

Trial balance as at 31 Decemberr 20X6

Account Debit Credit
$ $
Sales 9,000
Purchases 6,900
Rent 300
Stationery 70
Insurance 50
Fixtures and fittings, cost 700
Receivables 2,500
Payables 900
Cash at bank 1,100
Drawings 1,020
Capital introduced 2,740

12,640 12,640

You are given the following additional information:

(a) Rent was $100 per quarter payable in arrears. The property has been rented since
1 January 20X6.

(b) $10 of the insurance paid covered a period in 20X7.

(c) Goods unsold at 31 December 20X6 had cost K Kong $750.

 (d) The fixtures and fittings were expected to last for ten years and would then be
$50. Depreciation is to be on the straight-line basis.

(e) An allowance for receivables of $100 is to be created.

Prepare the statement of profit or loss of K Kong for the year ending 31 December 20X6
and a statement of financial position at that date.