Reference no: EM132998627

Question - Raven Fire Systems, established in 2000, sells a range of high-quality fire alarm systems. The financial year of the firm ends on 31 March.

The following balances were extracted from the accounting records as at 31 March 2021:

Account $

Accounts payable 20,800

Accounts receivable 14,200

Advertising expense 39,000

Accumulated depreciation - Furniture & fittings 6,800

Capital, Raj 69,000

Cash at bank 44,300

Commission income 33,300

Cost of goods sold 94,000

Drawings, Raj 6,900

Furniture & fittings 22,100

Inventories 57,000

Loan from OCBC 45,000

Salaries expense 56,000

Sales revenue 199,700

Sales returns 41,100

All accounts in the ledger have normal balances.

Additional information for year-end adjustments is as follows:

1) Sales revenue as at 31 March 2021 included $9,700 from a client who made an advance payment for goods to be delivered in May 2021.

2) One of the debtors owing $4,200 was declared bankrupt on 31 March 2021.

3) Salaries due and unpaid at year-end amounted to $2,000.

4) Advertising expense as at 31 March 2021 included $9,000 paid to the advertising agency for a promotional event in June 2021.

5) The firm earns a 1.5% commission income from some suppliers on the products sold. The commission earned each month is received on the 15th of the following month. For March 2021, the commission based on sales of $15,000 has not been recorded in the books.

6) Depreciation of furniture of $1,200 is to be provided for.

REQUIRED -

a) Prepare general journal entries for the necessary adjustments as at 31 March 2021. Narrations are not required.

b) Prepare the trial balance as at 31 March 2021, incorporating all adjustments. Show all workings.

c) Prepare the Profit & Loss Statement for the year ended 31 March 2021.

d) Prepare the Balance Sheet as at 31 March 2021.