2020 SMSS 3E POA EOY P2 Q1

2020 SMSS 3E POA EOY P2 Q1

1 The following balances were extracted from the books of Martin Shoes as at 31 July 2020.

 

$

Bank loan

50 000

Mortgage loan

160 000

Motor vehicle

45 000

Premise

220 000

Cash at bank

15 600

Trade receivables

3 400

Cash in hand

1 780

Inventory

27 500

Capital

115 000

Drawings

9 900

Sales revenue

48 900

Sales returns

5 800

Cost of sales

24 450

Commission income

6 890

Rent income

7 000

Discount allowed

720

Insurance 

8 000

Advertising

13 900

Salaries and wages

14 400

Trade payables

2 660

Additional information:

1. Received a cheque of $1 720 from a credit customer for a full settlement of $1 800.

2. The business sublets the premise and earns a rent income of $650 a month.

3. Insurance amount included an insurance coverage of $320 meant for the month of August 2020.

4. Received a credit note for $720 worth of goods from a credit supplier.

5. The owner sold his investments worth $36 000 to buy shoes worth $26 000 for the business. He deposited the remaining amount into the business bank account.

6. Distributed $4 800 worth of shoes to influencers for them to promote these shoes on their social media.

7. One-quarter of the mortgage loan is repayable by 31 December 2020.

REQUIRED

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

[7]

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

[15]

[TOTAL 22]

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