Reference no: EM132821229

Rossie owns EMCO's Casuals, a company specializing in good-quality, high-priced clothing. The materials are purchased from local suppliers and South Korea for premium cloths, made up into the finished garments in her own factory, and then sold in the local markets through stallholders.

• During the year ended 30 December 2019 Rossie had sales of RM260,040. Inventory levels have remained relatively consistent over the years, the starting inventory being RM21,500 and the closing inventory RM22,500.
• Rossie is not very generous to her staff. This is reflected in the wages paid during the year of only RM24,500.
• Business rates are a problem, since there is a dispute with the local council. She has paid a total of RM7,500 but there is a high possibility that she will have to pay a further RM2,450.
• Postage and advertising is another problem area. For the imports from South Korea it is necessary to pay all of the flight costs. These amounted to RM5,200 over the year
• She delivers all of her invoices to the stallholders in person and is paid promptly, with the exception of one debtor who owes RM2,000 and who has been declared bankrupt. This amount is to be written off.
• Advertising is minimal and is done at the shopping mall billboard: RM20 per week is paid to the landlord in return for permission to pin leaflets on the walls and an agreement that the landlord will place one slot every month on monthly mall pamphlet.
• Insurance of RM3,500 has been paid, but RM650 of this relates to the year ending 31 December 2020. Electricity bills amounted to RM2,900, but the bill for the final quarter is still outstanding and is expected to be approximately RM500. Purchases of cloth from South Korea for the year are currently recorded as being RM65,000, but there is an outstanding bill of RM3,500 which is not yet included in that figure.
• The factory and the machinery were bought at the same time and originally cost RM400,000. Depreciation has accumulated to the sum of RM100,000. The current year charge is 5 per cent on the reducing balance basis.
• The business had a computer which was purchased about three years ago and which Rossie reckons has about another two years of life left. It cost RM4,000 and Rossie uses the straight line method of calculating the depreciation charge. The computer will be worthless at the end of that time.
• Stationery charges amounted to RM1,350 and he had telephone bills of RM3,500, RM200 of which relates to January and February 2020. In the year ending 31 December 2019, she had paid RM150 which related to telephone charges in the year ending 30 December 2019.
• Rossie has also paid RM5,000 for a top-of-the-range digital home cinema system. She has enquired as to whether she can class this as a business expense as it has enabled her to relax after long days at the office.
• Her salary for the year was RM50,000.
• Cash in hand at 31 December 2019 was RM600 which she borrowed from her sister temporarily on 31 December when she realised that there was no cash available to pay any expenses.

Required:

Problem a) Generate and print out Profit & Loss Account as at 31 December 2019.

Problem b) Generate and print out Balance Sheet as at 31 December 2019.

Problem c) Generate and print out General Ledger as at 31 December 2019.