2020 JYSS 3E POA EOY P2 Q1

2020 JYSS 3E POA EOY P2 Q1

1 The following balances were extracted from the books of Zaman Traders on 31 July 2020.

 

$

Equipment

196 000

Motor vehicles

84 000

Accumulated depreciation

 

        Equipment

68 000

        Motor vehicles

32 000

Sales revenue

325 000

Sales returns

2 400

Cost of sales

94 300

Salaries and wages

78 960

Rental expense

5 600

General expenses

39 700

Interest income

1 000

Trade receivables

18 500

Trade payables

13 480

Bank loan(repayable in 5 years)

14 300

Cash in bank

15 600

Capital

126 280

Drawings

45 000

Additional information

1. General expenses $350 was prepaid.

2. Rental of $560 were owing.

3. Interest income earned per annum is $1 500.

4. Depreciation per annum is to be charged as follows :

Equipment, 20% using reducing balance method

Motor vehicles, 25% using straight line method.

5. Transferred $2 000 cash from the bank to the office.

REQUIRED

a. Prepare the statement of financial performance for the year ended 31 July 2020.

[12]

b. Prepare the statement of financial position as at 31 July 2020.

[12]

c. What is the effect of not adjusting , income received in advance, on

[2]

i. gross profit

ii. liabilities

[TOTAL 24]

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(i) no effect on GP

( ii ) Liabilities is understated

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