Tutorial Question 10

The following Trial Balance was extracted from the books of Mega Trading, a sole trader
business as at 31 March 2021:

Debit (P) Credit (P)

Sales 52 000
Opening Inventory: 1 April 2020 2 000
Discounts Allowed 2 000
Returns Outwards 500
Salaries and Wages 7 500
Drawings 1 000
Repairs and Maintenance 6 000
Carriage Inwards 1 000
Interest received on Cash at Bank 1 500
Buildings at cost 40 000
Provision for Depreciation: Buildings 5 000
Motor Van at cost 30 000
Provision for Depreciation: Motor Van 10 000
Accounts Receivable 5 000
Accounts Payable 3 000
Discounts Received 2 500
Cash in hand 500
Returns Inwards 2 000
Carriage Outwards 500
Cash at Bank 10 000
Long term Loan 10 000
Purchases 20 000
Rent received from sub-letting 4 500
Bad Debts 500
Office expenses 1 000
Capital 40 000
129 000 129 000
Additional Information:

1. Stock of Inventory as at 31 March 2021 was P 6 000.

2. Carriage Outwards accrued was P1 000.
3. Salaries prepaid were P1 500.
4. Additional Bad debts to be written off is P1 000.
5. Rent from sub-letting received in advance was P500.
6. Interest accrued on cash at bank but not yet received P500.

1
 7. The proprietor had taken Inventory costing P2 000 for his personal use, but the
transaction has not yet been recorded in the books of the business.
8. Depreciate Buildings by 10% on Straight Line Method and Motor Van by 5% on Reducing
Balance Method.
Required:
a) Income Statement of Mega trading for the year ended 31 March 2021
b) Statement of Financial Position as at 31 March 2021