QUESTION TWO From the following particulars show the adjusting journal entries and prepare Trading, Profit and Loss Account and Balance Sheet. Kshs Capital 1st January, 2004 33,900 Sales 74,924 Interest Revenue 100 Bills receivable 900 Bills Payable 800 Sundry debtors 13,100 Sundry creditors 5,800 Drawings 5,600 Carriage outwards 160 Carriage inwards 308 Salaries and wages 6,500 Stocks 1st January, 2004 16,248 Bank overdraft 3,290 Purchases 50,504 Freehold Premises 9,750 Motor Vehicles 12,000 Advertising 1,600 Bad debts expense 400 Insurance 124 Customs Duty 3,800 Mortgage on Premises 1,000 Interest expense on Mortgage 20 Provision for Depreciation 1,200 The following items are to be taken into account:-
a) Stock at 30th June 2004 valued at Kshs 12,900.
b) Insurance paid in advance, Kshs 4.
c) Interest on mortgage accrued, Kshs 25.
d) Salaries and wages accrued, Kshs 200.
e) Depreciation of motor vehicles at 10% per annum.
f) Interest Revenue accrued, Kshs 15.
g) Write off bad debts, Kshs 90.
h) Make a provision of 2% on sundry debtors for doubtful debts (to the nearest Kshs)
i) Make a provision of 5% for discounts to sundry debtors (to nearest Kshs)
j) Make a provision of 5% for discounts from sundry creditors ( to the nearest Kshs)
Required:
i) For adjusting journal entries (9 marks)
ii) Prepare Trading, Profit and Loss Account and Balance Sheet as at 30th June, 2004.