Pre Unit test

SEKOLAH HARAPAN BANGSA

ACADEMIC YEAR 2023/2024

Name : Score Teacher’s Signature Parent’s Signature

Subject : Accounting
Class : 11 Science & Social
Day/ Date : November 2023
Time : –
STRUCTUR QUESTION [Total points 35]
1. Warren’s trial balance for the year ended 31 December 2021 showed the following balances:
$ $
Property at cost 500 000
Machinery at cost 104 000
Provision for depreciation on machinery at 1 January 31 200
2021
Provision for doubtful debts at 1 January 2021 1 000
Sales 486 000
Purchases 368 000
Sales returns 4 080
Purchases returns 3 960
Carriage inwards 700
Carriage outwards 1 600
Rent received 4 840
Discount allowed 3 600
Discount received 2 600
Electricity expense 4 200
General expenses 18 680
Inventory at 1 January 2021 27 000
Trade receivables 18 000
Trade payables 22 920
Bank (Credit) 16 520
Cash 1 980
Drawings 37 200
Non-current liability loan at 11% per annum 120 000
Capital 400 000
1 089 040 1 089 040
Additional information at 31 December 2021:
1. Inventory was valued at $30 200.
2. No interest had been paid or provided for on the loan, which had been taken out on 1 July 2021.
3. Warren’s tenant had paid only eleven months’ rent; one month’s rent was due and unpaid.
4. Electricity expense prepaid amounted to $80.
5. General expenses accrued amounted to $100.
6. Debts of $400 were to be written off.
7. Doubtful debts provision was to be 3% of trade receivables at the end of the year.
8. Depreciation was to be provided on machinery at 26.5% using the reducing (diminishing) balance
method.

REQUIRED:
Prepare the income statement and statement of financial position for the year ended 31 December 2021.

Page 1
 Warren Income Statement at 31 December 2021
$ $ $
Sales 486 000
Sales returns (4 080) 481 920
Cost of sales:
Inventory at 1 January 2021 27 000
Purchases 368 000
Purchase returns (3 960)
Carriage inwards 700 364 740
391 740
Inventory at 31 December 2021 (30 200) (361 540)
Gross profit 120 380
Discount received 2 600
Rent received (4 840 : 11 + 4 840) 5 280
A decrease in provision for doubtful debts (1 000 472
– (18 000 – 400 X 3%))
128 732
Overheads:
Carriage outwards 1 600
Discount allowed 3 600
Electricity expense (4 200 - 80) 4 120
General expenses (18 680 + 100) 18 780
Interest expense (120 000 X 11% X 6/12) 6 600
Irrecoverable debts 400
Depreciation of machinery (104 000 – 31 200 X 19 292 (54 392)
26.5%)
Net profit (loss) 74 340

Warren Statement of Financial Position at 31 December 2021

$ $
Property at cost 500 000
Machinery at cost 104 000
Provision for depreciation on machinery (31 200 + 19 292) (50 492) 53 508
553 508
Current assets:
Inventory at 31 December 2021 30 200
Trade receivables (18 000-528-400) 17 072
Other receivables (80+440) 520
Cash 1 980
49 772
Current liabilities:
Trade payables (22 920)
Bank (Credit) (16 520)
Other payables (100 + 6 600) (6 700)
Working capital 3 632
557 140
Non-current liability:
Non-current liability loan at 11% per annum 120 000
437 140
Financed by:
Capital 400 000
Net profit 74 340
474 340
Drawings (37 200)
Page 2 437 140