Question 1

Gibson store has the following Trial Balance as at 30 April 2010.

Dr Cr
N$ N$
Capital 12 500
Debtors 10 000
Creditors 11 250
Purchases 45 500
Land & Building at cost 70 000
Sales 149 000
Furniture at cost 6 500
Motor vehicles 22 000
Rent 11 000
Lighting and heating 5 000
Discount allowed 1000
Bad debts 3 000
Accumulated depreciation: Furniture 1 000
Accumulated depreciation: Vehicles 1 250
Provision for bad and doubtful debts 350
Bank 2 300
Bank Loan 13 000
Discount received 150
Returns inward 200
Inventory at as 1 May 2009 11 100
Subscription 900
Total 188 500 188 500

Gibson provided the following further information:

 Inventory as at 30 April 2010 amounted to N$10 000.

 The lease agreement of 1st May 2009 provides for a monthly rent of N$1 000,
payable in advance on the 1st of every month.
 An additional bad debt of N$250 is to be written off. The provision against
doubtful debts is to be adjusted to 2% of outstanding debtors.
 Motor Vehicle depreciation is to be charged at 20 % per annum on the cost.
 Furniture and Fittings are to be depreciated at 10% using the reducing
balance method.
 N$200 was owed to the City of Windhoek as at 30 April 2010.
 The subsription fee related to a subsription for a journal. The annual fees of
N$900 was paid on 1st Septermber 2009 and is for a one year period starting
from 1st September 2009.

Required:

1. Prepare a Statement of Profit or Loss and other Comprehensive Income and

the Statement of Financial Position of Gibson store as at 30 April 2010.
2. Pass journal entries for the year end adjustment as at 30 April 2010.