Reference no: EM133004710

Problem - Mr. Andy Smith is a trader. He does not keep proper books of accounts. His assets and liabilities as at 31st December, 2018 were as follows; [10]

Cash in hand Tk. 7,000

Cash at Bank 72,500

Stock-in-trade 1,50,000

Furniture 50,000

Sundry Debtors 88,000

Sundry creditor 1,50,000

During the year ended on 31st December, 2019 his drawings were Tk.80,000. On 1st July, 2019 he introduced additional capital of Tk.70,000.

At 31st December, 2019 his assets and liabilities were as follows:

Cash in hand Tk.6,000, Cash at Bank Tk.95,000, Stock-in-trade Tk.1,68,000, Furniture Tk. 50,000, Motor van Tk.90,000. Sundry debtors Tk.97,000 and sundry creditor Tk.1,68,000.

Required - Prepare a statement of profit and loss for the year ended 31st December, 2019 and a statement of affairs as at that date after considering the following adjustments:

(a) Depreciate furniture by 10%

(b) Provision for bad debt is to be created on sundry Debtors at 5%;

(c) Interest on capital is to be charged at 5% p.a;

(d) Unpaid salary to Manager Tk.5000.