Documente Academic
Documente Profesional
Documente Cultură
1. Total Sales were 1,000,000. Cash sales were 700,000 credit sales were 300,000.
2. Cash collected from debtors (accounts receivables) amounted to 310,000. Discount given
amounted to 20,000. 4,000 worth of Bad Debts were written off and 2,000 worth of previously
Bad Debts were recovered. Allowance for Doubtful Debts is maintained at 2.5% of closing
Accounts Receivables balance.
3. Inventory worth 520,000 was purchased. 300,000 were purchased in cash the rest was
purchased on credit. Inventory worth 20,000 which was purchased on credit was returned as it
did not meet our specifications. Inventory worth 510,000 was used in the business.
4. Cash paid for Accounts Payables amounted to 220,000. We also received a discount worth
30,000 from our creditors.
5. The bank loan which was borrowed on 31st March 2013. No Loan is paid off in the current year
however interest is paid annually on March 31st.
6. A piece of equipment worth 40,000 was acquired in exchange of a 10% bank loan on January 1st
2014. The loan is paid off in 10 quarterly installments along with the accrued interest.
7. The existing equipment and warehouse are 1 year old and have a useful life of 10 years each.
The new equipment also had a useful life of 10 years.
8. On January 1st 2014 a piece of old equipment which was purchased for 80,000 was sold for
60,000. Investments were sold for 135,000.
9. Total wages paid during the year amounted to 200,000. Total Administrative salaries amounted
to 40,000. Total payments for factory Insurance amounted to 30,000. This amount covered the
period starting from 31st March 2013 to 30th June 2014.
10. Dividends declared amounted to 50,000. These dividends were not paid as of 31st March 2014.
11. Provision for tax is created at 30% of PBT. The assessment for 2011-12 was completed and the
assessed tax paid was 55,000. Total Advanced tax paid for the current year was 120,000.
Record the effects of each transaction on Income Statement, Balance Sheet, and Cash Flow
Statement.