Reference no: EM132709289
Question - Tricia owns a retail store. Her business's financial year end is 31st December. The following trial balance was extracted from the business's books of account on 31st December 2018.
Trial balance at 31 December 2018
Dr Cr
Accounts payable 11,850
Accounts Receivable 27,000
Bad Debts 850
Capital 61,210
Cash at bank 3,890
Drawings 31,300
Equipment:
Cost 35,000
Provision for depreciation at 1 January 2018 14,000
Gross Profit 151,270
Inventory at 31 December 2018 29,480
Operating expenses 57,610
Rent 25,400
Vehicles:
Cost 45,000
Provision for depreciation at 1 January 2018 16,200
255,530 255,530
Additional information at 31 December 2018:
i. Rent, $1320, prepaid
ii. Operating expenses, $2,080, due but unpaid
iii. Tricia decided to make a provision for doubtful debts of 5% of the accounts receivable at the year end.
iv. Depreciation charged on non-current assets are as follows:
Equipment is depreciated by 20% per annum using the straight-line method Vehicles are depreciated by 20% per annum using the reducing balance method.
Required - Prepare end of year financial statements.