Prepare the final accounts of a trader

Reference no: EM13181704

You are required to prepare the final accounts of a trader from the following information:

Assets and Liabilities:

	1.1.2008 $	31.12.2008 $
Furniture	18,000	19,050
Stock	24,000	21,000
Debto$	48,000	?
Credito$	33,000	45,000
Prepaid Expenses	1,800	2,100
Outstanding Expenses	6,000	5,400
Cash in hand and at bank	3,600	1,875

Cash transactions during the year 2008:

Receipts from Debto$ (after allowing 2 1/2% discount)	1,75,000
Bills Receivable discounted (at an average rate of 2%)	18,375
Paid to Creditor (@ 2% discount)	1,17,600
Freight inward	9,000
Drawings	21,000
Furniture purchased	3,000
4% Investments purchased at 96% (on 1.7.2008)	28,800
Expenses including salary	43,500
Miscellaneous receipts	1,500

During the year Bills Receivable received were $30,000; $6,000 of which are endo$ed in favour of creditor, of the later a bill for $ 1,200 was dishonoured.

Goods costing $ 2,700 were used for advertising materials

Goods are invariably sold to show a profit of 50% on cost

Difference in cash, if any, is to be treated as drawings or introduction of capital.

Provision for doubtful debts is to be provided @ 2 1/2% on debto$.

Reference no: EM13181704

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