1.

The trial balance below is extracted from the books of Astaka Enterprise, a sole
proprietorship:
Astaka Enterprise
Trial Balance as at 30 June 2019
Debit Credit
(RM) (RM)
Capital 198,095
Furniture and fittings 30,450
Motor vehicles 115,000
Purchases 52,600
Sales 261,500
Rental expenses 24,000
Salaries and wages 57,550
Bad debts 1,500
General expenses 15,400
Bank 47,335
Provision for doubtful debts 500
Inventory at 1 July 2018 87,260
Account receivables 42,000
Account payables 31,000
Drawings 18,000
491,095 491,095

Additional information:
(i) Inventory at 30 June 2019 was valued at RM93,350.
(ii) General expenses paid in advance at 30 June 2019 is RM500.
(iii) Wages unpaid at 30 June 2019 is RM1,500.
(iv) Provision for doubtful debt is 5% of accounts receivable.
(v) Depreciation is to be charged on furniture and fittings at 5% per annum on cost, and
22.5% per annum for motor vehicles.

Required:
(a) Prepare Statement of Profit or Loss for the year ended 30 June 2019.
(b) Prepare Statement of Financial Position as at that date.
 SOLUTION
(a)
Astaka Enterprise
Statement of Profit or Loss for the year ended 30 June 2019
RM RM
Sales 261,500
Less cost of goods sold:
Opening inventory 87,260
Purchases 52,600
Less Closing inventory (93,350)
(261500)
Gross Profit 261500
Less Expenses:
Rental expenses 24,000
Salaries and wages 59,050
(RM57,550+RM1,500)
Bad debts 1,500
General expenses (RM15,400-RM500) 14,900
Doubtful debts 2,100
Depreciation expenses – furniture and 1,523
fittings
Depreciation expenses – motor vehicles 25,875
(128,948)
Net profit 86,042

Workings:
(ii) Dt Prepaid general expenses RM500
Ct General expenses RM500

(iii) Dt Salaries and wages expenses RM1,500

Ct Accrued expenses-salaries and wages RM1,500

(iv) Dt Doubtful debts (expenses) RM2,100

Ct Provision for doubtful debts (SOFP-Current assets) RM2,100
(RM42,000 X 5%)

(v) Dt. Depreciation expenses-furniture and fittings RM1,523

Ct. Provision of depreciation-furniture and fittings RM1,523
(RM30,450 X 5%)

Dt. Depreciation expenses- motor vehicles RM25,875

Ct. Provision of depreciation- motor vehicles RM25,875
(RM115,000 X 22.5%)

2
(b)
Astaka Enterprise
Statement of Financial Position as at 30 June 2019
RM RM
Non-current assets:
Furniture and fittings 30,450
Less: Accumulated depreciation (1,523) 0

Motor vehicles 115,000

Less: Accumulated depreciation (25,875) 89,125
Total non-current assets 118,052

Current assets:
Account receivables 42,000
Less: Provision for doubtful debts (2,100+500) (2,600)
Net account receivables 39,400
Closing Inventory 93,350
Prepaid expenses-General expenses 500
Bank 47,335
Total current assets 180,585
Total assets 298,637

Owner’s equity:
Capital 198,095
Net profit 86,042
Less: Drawings (18,000)
Total owner’s equity 266,137

Current liabilities:
Accrued wages 1,500
Account payables 31,000
Total current liabilities 32,500
Total equity and liability 298,637