Reference no: EM133133967
Question - Rupert McDonald is a sole trader who operates a haberdashery in St Elizabeth. Mr. McDonald opened on April 1, 2013 in Bethlehem Plaza where his monthly rental is $20,000. This rent expense will remain at this rate for the next four (4) years. He rents a small section of the shop to Jim Bone, since January 1, 2015 for $12,000 per month. The following trial balance was as at March 31, 2015.
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Particulars
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DR ($)
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CR($)
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Motor Van
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3,000,000
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Provision for depreciation - Motor Van
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480,000
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Capital
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2,840,000
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Purchases and Sales
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640,000
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3,034,000
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Inventory at April 1, 2014
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61,200
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Motor Expenses
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36,300
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Bad debts
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6,500
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Provision for depreciation - Equipment and Furniture
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90,000
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Salaries and wages
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334,000
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Electricity
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100,000
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Loan
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731,000
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Commission received
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20,000
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Bank
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154,400
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Rent received from Jim Bone
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50,000
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Discounts
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7,500
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8,000
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Returns
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22,000
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40,000
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Carriage inwards
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17,500
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Carriage outwards
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38,500
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Provision for bad debts
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16,000
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Accounts receivable and payable
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240,000
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353,900
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Drawings
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342,000
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Equipment and Furniture
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2,500,000
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Cash
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23,000
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Rent paid
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140,000
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7,662,900
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7,662,900
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Notes
a) Electricity has been prepaid $25,000.
b) The provision for bad debt is to be adjusted to 15% of accounts receivables.
c) Stock at the yearend was valued at $197,000; however it appears that an additional amount for $33,000 was found in a store room. The amount was deemed material and should be accounted for in the financial statements.
d) Depreciate motor van at 8% using the straight line method and equipment and furniture 5% based on the reducing balance method.
e) Commission received owing amounted to $10,500.
Required - Prepare Rupert McDonald's Statement of Profit or Loss for the year ended March 31, 2015?