B Otse, a sole trader, extracted the following trial balance from his books at the close of business on 31 July 2018. Debit Credit Purchases Sales Capital Bank Cash Discount allowed Returns Inwards Returns outwards Carriage inwards Rent Provision for doubtful debts Office furniture Motor van Accounts Receivables Accounts Payables Drawings Salaries and wages General expenses 65, 240 20, 000 200 2, 400 3, 580 2, 410 6, 780 5, 600 15, 000 12, 300 19, 600 42, 000 560 137, 425 45, 845 1, 400 500 10, 500 Total 195, 670 195, 670 Notes i. Closing inventory 31 March 2017 P6, 500 ii. Accrued salaries and wages P5, 000 iii. Prepaid rent P800 iv. Provide for depreciation as follows: Office furniture P560; Motor van P3, 750 REQUIRED: a. Prepare a Statement of Comprehensive Income for the year ended 31 July 2018. b. Prepare a Statement of Financial Position as at 31 July 2018.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
B Otse, a sole trader, extracted the following
|
Debit |
Credit |
||
|
Purchases Sales Capital Bank Cash Discount allowed Returns Inwards Returns outwards Carriage inwards Rent Provision for doubtful debts Office furniture Motor van Accounts Payables Drawings Salaries and wages General expenses |
65, 240
20, 000 200 2, 400 3, 580
2, 410 6, 780
5, 600 15, 000 12, 300
19, 600 42, 000 560 |
137, 425 45, 845
1, 400
500
10, 500 |
|
|
Total |
195, 670 |
195, 670 |
|
Notes
i. Closing inventory 31 March 2017 P6, 500
ii. Accrued salaries and wages P5, 000
iii. Prepaid rent P800
iv. Provide for
REQUIRED:
a. Prepare a Statement of Comprehensive Income for the year ended 31 July 2018.
b. Prepare a
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