Financial statements of Sole traders with adjustments

Question 1
Junaid provides a trial balance of his accounts as at 31/12/2023.

Trial balance as at 31/12/2023 $

Debit Credit

Revenue 116,400
Purchases 74,000
Equipment at cost 30,000

Provision for depreciation - Equipment 10,800

Insurance 2,500

Rent received 5,800

Trade receivables 25,000

Provision for doubtful debts 1,500

Trade payables 14,000

Bank 12,000
Inventory 1/01/2023 18,000
Drawings 8,000

Capital as at 1/01/2023 21,000

169,500 169,500
Additional information
1. Inventory as at 31/12/2023 is $14,000
2. Depreciation to be charged on Equipment at 20% p.a. using
reducing balance method.
3. Junaid was unable to collect $1000 worth debts from a credit
customer.
4. The provision for doubtful debts is to be maintained at 5% of trade
receivables.

Required:
Prepare the Income statement and SOFP for the year ended
31/12/2023.
Question 2
Following details are related to Ruth's business for the year ended 31/03/2020
$
Cash balance 4000
Rent expense paid
30/06/2019 200
30/9/2019 200
31/12/2019 200
( rent expense p.a. $800)

Electricity expense paid

30/09/2019 1200
30/04/2020 1200
( electricity expense for the year $2400 )

Interest income on 12% Fixed deposit of $8000 received on 31/01/2020 800

Maintenance expense paid $1000 on 30/09/2019. Expense amount relevant for the year is
$800

Required :
1. Prepare the relevant ledger accounts
2. Prepare the extracts of Income statement and SOFP

Question 3
Following is the Trial balance of Priya's business as at
31/12/2022.

Dr Cr
$ $

Purchases 20,000

Sales 40,000

Inventory 1/1/2022 4,000

Salaries 1,800

Bank loan interest 200

Rent income 5,800

Electricity 1,950

Insurance 1,200

Stationery 150

Maintenance 1,900

10% Bank loan 3,000

Land and Building 12,000

Furniture and Fittings 8,000

Trade receivables 2,400

Trade payables 600

Cash 20,000

Capital 26,200

Sales returns 3,000

Carriage inwards 800

Purchases returns 1,800

77,400 77,400

Notes
1. inventory as at 31/12/2022 is $1200
2. Unused stationery as at 31/12/2022 $50
3. Pre paid Insurance as at 31/12/2022 $200
4. Rent income receivable as at 31/12/2022 $200
5.Maintenance expense owing as at 31/12/2022 $100
6. Additional capital introduced during the year was $2000

Required :
Prepare the Income statement and SOFP of Priya's business for the financial year ended
31/12/2022.
Question 4

Following is the Trial balance of B.Brown's business as at 30/09/2020.

Dr Cr
$ $

Capital 49,675

Drawings 28,600

Bank 4,420

Cash 112

Trade receivables 38,100

Trade payables 26,300

Inventory 72,410

Motor vehicles 5,650

Office Equipments 7,470

Sales 391,400

Purchases 254,810

Return Inwards 2,110

Carriage Inwards 760

Motor expenses 1,240

Rent 2,850

Telephone charges 1,490

Wages and Salaries 8,200

Insurance 680

Office expenses 39,600

Sundry expenses 745

 392

216

468,615 468,615

Notes
1. Inventory as at 30/09/2020 $89404
2. Wages and salaries accrued as at 30/09/2020 $340
3. Rent pre paid as at 30/09/2020 $230
4. Provide depreciation for Motor vehicles and Office equipment at 10%
on straight line method.

Required:

Prepare Income statement and SOFP for the financial year ended 30/09/2020.