Lin has been in business as a retailer and the following balances were extracted from his books on 31 December 1998: Finance Accounting Assignment, NUS, Singapore

Question 1

Lin has been in business as a retailer and the following balances were extracted from his books on 31 December 1998.

You are required to prepare the Trading, Profit, and Loss Accounts for the half year ended 31 December 1998 and a Balance Sheet as of that date showing as much detail as possible and taking into account the following:

• The closing stock was valued at $2,089;
• Lin had withdrawn for his own personal use, $100 from the sales receipts every month. This has not been taken into account;
• A provision of 5% of debtors is to be created;
• of the $452 for insurance, $68 was the insurance premium for Lin’s own private dwelling; (v) It was estimated that $37 was owed for lighting.

Question 2

Wang is a sole trader.

Draw up the Trade, Profit, and Loss Accounts and the Balance Sheet for Wang from the following Trial Balance after making the following adjustments:

• Depreciation at the rate of 10% to be written off plant and machinery and building;
• Wang had taken goods from stock to the value of S80 for his own use and no entries had been made in the books;
• Rates, amounting to S60 had been paid for half year ended 31 March 1999;
• A Provision for Bad Debts of 5% of debtors to be written off;
• Part of the building was sublet out on 1 October 1998 at an annual rent of $1,600; rent has not been collected yet.