Question 1 Mr Chandra’s ledger accounts for the year ended 30th April 2016 showed the following balances:- RM Premises at cost 250,000 Machinery at cost 52,000 Provision for depreciation on machinery

Question 1

Mr Chandra’s ledger accounts for the year ended 30th April 2016 showed the following balances:-

RM

Premises at cost

250,000

Machinery at cost

52,000

Provision for depreciation on machinery at 1 May 2015

15,600

Provision for doubtful debts at 1 May 2015 (Cr)

500

Sales

243,000

Purchases

184,000

Return inwards

2,040

Return outwards

1,980

Carriage inwards

350

Carriage outwards

800

Rent received

2,420

Discount allowed

1,800

Discount received

1,300

Electricity

2,100

General expenses

9,340

Stock at 1 May 2015

13,500

Debtors

9,000

Creditors

11,460

Bank balance overdrawn

8,260

Cash

990

Drawings

18,600

Long-term loan at 11% per annum

60,000

Capital 1May 2015

200,000

Additional information on 30 April 2016:

1. Stock was valued at RM15,100

2. No interest has been paid or provided for on the loan, which had been taken out on 1st November 2015

3. Mr Chandra’s tenant had paid only eleven month’s rent; one month’s rent was due and unpaid

4. Electricity paid for the period 1 May 2016 to 30th June 2016 amount to RM40

5. General expenses which was due and unpaid amounted to RM50

6. One of the debtors, Mr Phillo had passed away and the company decided to write-off his debts of RM200.

Depreciation was to be provided on machinery at 40% using the reducing balance method

Doubtful debts provision was to be 3% of debtors at the end of the year

Required:

a. Prepare Mr Chandra’s Income Statement for the year ended 30th April 2016

b. Prepare Mr Chandra’s Statement of Financial Position as at 30th April 2016