Theory question 105
Incomplete RecordsThe following transactions were extracted from the books of Odis Enterprises for the year ended 31st December 2018: (i) cash received from trade debtors GH¢100,000; (ii) cash paid to suppliers GH¢72,000; (iii) expenses paid during the year were: rent GH¢2,500, general expenses GH¢1,800; (iv) a cash of GH¢5,200 was withdrawn by the proprietor for personal use; (v) fixed assets valued at GH¢8,000 on 31st December 2017 were to be depreciated at 10% per annum.
Additional information (31st December 2017 / 31st December 2018, GH¢):
Trade debtors 11,000 / 13,200
Trade creditors 4,000 / 6,500
Rent owing -- / 500
Cash 12,100 / 30,600
Stock 15,900 / 17,000
You are required to prepare:
(a) Statement of Affairs as at 1st January 2018;
(b) Cash Book;
(c) Trading, Profit and Loss Account for the year ended 31st December 2018.
Show the model answer
(a) Statement of Affairs at 1/1/2018 (GH¢): fixed assets 8,000; stock 15,900; debtors 11,000; cash 12,100 = 47,000; less creditors 4,000; capital 43,000.
(b) Cash Book: Dr balance b/d 12,100; debtors 100,000 = 112,100 | Cr suppliers 72,000; rent 2,500; general expenses 1,800; drawings 5,200; balance c/d 30,600 = 112,100.
(c) Sales = 100,000 + 13,200 − 11,000 = 102,200. Purchases = 72,000 + 6,500 − 4,000 = 74,500.
Trading: sales 102,200; opening stock 15,900 + purchases 74,500 − closing stock 17,000 = cost of sales 73,400; gross profit 28,800.
Profit and loss: rent (2,500 + 500 owing) 3,000; general expenses 1,800; depreciation (10% × 8,000) 800 = 5,600. Net profit GH¢23,200.
Work out opening capital, then credit sales and purchases from the debtors and creditors movements.