BAFS Self-set Question

1. T Lai is a sole proprietor. The following is the trial balance extracted from the ledgers of her
business as at 30 April 2017.
T Lai
Trial balance as at 30 April 2017
Dr Cr
$ $
Cash in hand 729,524
Drawings 471,486
Buildings 732,158
Postage 226,542
Account receivable and payable 166,066 355,241
Purchases and Sales 3,412,039 5,659,712
Loan from S So (repayable in 2020) 162,354
Carriage outwards 47,637
Carriage inwards 228,963
Discount received and allowed 515,726 522,048
Inventory as at 1 April 2016 632,027
Vans 738,285
Utilities 99,928
Capital 585,241
Returns 125,792 462,077
Salaries 161,782
Office equipment 437,089
Bank overdraft 532,562
Interest revenue 445,809
8,725,044 8,725,044

# Inventory as at 30 April 2017 was valved at $447,078.

Required:
(i) Prepare for T Lai’s business an income statement for the year ended 30 April 2017 and
(ii) a statement of financial position as at that date.
Solution:
T Lai
Income statement for the year ended 30 April 2017
$ $
Opening inventory 632,027 Sales 5,659,712
Add: Purchases 3,412,039 Less: Returns inwards (125,792)
Add: Carriage inwards 228,963
Less: Returns outwards (462,077)
Less: Closing inventory (447,078)
Cost of goods sold 3,363,874
Gross profit c/d 2,170,046
5,533,920 5,533,920

Postage 226,542 Gross profit b/d 2,170,046

Carriage outwards 47,637 Discount received 522,048
Discount allowed 515,726 Interest revenue 445,809
Utilities 99,928
Salaries 161,782
Net profit 2,086,288
3,137,903 3,137,903

T Lai
Statement of financial position as at 30 April 2017
$ $
Non-currnet assets Capital
Buildings 732,158 Balance as at 1 May 2016 585,241
Vans 738,285 Add: Net profit 2,086,288
Office equipment 437,089 Less: Drawings (471,486)
1,907,532 2,200,043
Current assets Non-current liabilities
Inventory 447,078 Loan from S So 162,354
Account receivable 166,066
Cash in hand 729,524 Current liabilities
1,342,668 Account payable 355,241
Bank overdraft 532,562
887,803
3,250,200 3,250,200