The following Trial Balance was extracted from the books of Kaseka Bailey on June 30, 2021 Particulars DR ($) CR($) Building 240,000 Equipment 155,000 Purchases 165,000 Wages 45,500 Bad debts 1,700 Donations to charity 3,000 Provision for depreciation – Building 16,000 Provision for depreciation - Equipment 7,500 Capital 250,000 Loan 80,000 Commission received 20,000 Bank 24,500 Rent received from Gareth Simms 35,000 Discounts 4,150 7,500 Returns 2,500 3,500 Carriage inwards 5,250 Carriage outwards 3,200 Provision for bad debts 8,000 Creditors 27,200 Drawings 27,000 Stock at July 1, 2014 35,200 Cash 7,500 Debtors 45,000 Sales 270,800 Insurance 10,000 750,000 750,000 Notes Insurance prepaid was $2,500 The provision for bad debt is to be adjusted to 20% of debtors Stock at the yearend was valued at $40,700; however it appears that an additional amount for $13,000 was found in a store room. The amount was deemed material and should be accounted for in the financial statements. Wages were to be paid at $4,000 per month for the year. Depreciate building at 9% using the straight line method and equipment 12% based on the reducing balance method. Commission received owing amounted to $5,500 Kaseka rented Gareth office space for nine (9) nine months of the year, charging him $3,600 per month Questions: Net sales for the year is: Cost of goods sold for the year is: Gross profit for the year is: Total Other income for the year is: Total current assets at year end is The prepaid insurance of $2,500 is: The current liabilities at year end is:

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 5Q: For each of the following transactions, state whether the cost would be capitalized (C) or recorded...

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Question

The following Trial Balance was extracted from the books of Kaseka Bailey on June 30, 2021

Particulars	DR ($)	CR($)
Building	240,000
Equipment	155,000
Purchases	165,000
Wages	45,500
Bad debts	1,700
Donations to charity	3,000
Provision for depreciation – Building		16,000
Provision for depreciation - Equipment		7,500
Capital		250,000
Loan		80,000
Commission received		20,000
Bank		24,500
Rent received from Gareth Simms		35,000
Discounts	4,150	7,500
Returns	2,500	3,500
Carriage inwards	5,250
Carriage outwards	3,200
Provision for bad debts		8,000
Creditors		27,200
Drawings	27,000
Stock at July 1, 2014	35,200
Cash	7,500
Debtors	45,000
Sales		270,800
Insurance	10,000
	750,000	750,000

Notes

Insurance prepaid was $2,500
The provision for bad debt is to be adjusted to 20% of debtors
Stock at the yearend was valued at $40,700; however it appears that an additional amount for $13,000 was found in a store room. The amount was deemed material and should be accounted for in the financial statements.
Wages were to be paid at $4,000 per month for the year.
Depreciate building at 9% using the straight line method and equipment 12% based on the reducing balance method.
Commission received owing amounted to $5,500
Kaseka rented Gareth office space for nine (9) nine months of the year, charging him $3,600 per month