SGSS_4N_Prelim_P2.docx

1 Answerallquestions. 1 ThefollowingbalanceswereextractedfromthebooksofGBTradingon 30June2022. $Salesrevenue 100560Salesreturns 5920Costofsales 76990Equipmentatcost 48000Motorvehiclesatcost 146200Accumulateddepreciation - Equipment 21600- Motorvehicles 31200Tradereceivables 20800Tradepayables 10100Cashatbank(credit) 6200Inventory 19100Allowanceforimpairmentoftradereceivables 800Wagesandsalaries 19800Motorvehiclesexpenses 3900Insurance 4960Discountreceived 1210Commissionincome 6000Rentexpense 141004%Bankloan(repayable2025) 50000Drawings 13200Capital,1July2021 145300 Additionalinformation 1 $560ofinsurancewasprepaid.2 Rentof$2500waspayableforthemonthofJune2022.3 Commissionincomeof$500wasstilloutstanding.4 Basedon objectiveevidence,it wasestimatedthat5%of thetradereceivableswillbedeemedtobeuncollectible.5 Itisthebusiness’policytoprovidedepreciationasfollows: - Equipmentat10%perannumusingthereducingbalancemethod.- Motorvehiclesat20%perannumusingthestraightlinemethod.[TurnoverSGSS/POAP2/4N/Prelim/2022

2 6 Interestfortheloanwasyettobepaidon30June2022.7 10%ofthebankloantoberepaidon10July2022. REQUIRED (a) Preparethestatementoffinancialperformancefortheyearended30June2022. [10] (b) Preparethestatementoffinancialpositionasat30June2022. [10] [Total:20] [TurnoverSGSS/POAP2/4N/Prelim/2022

3 2 ThefollowingwastheallowanceforimpairmentoftradereceivablesaccountofSGTradingfortheyearended31July2021. Allowanceforimpairmentoftradereceivablesaccount 2020 Debit$ Credit$ Balance$Aug 1 Balanceb/d 640Cr2021July31 Impairmentlossontradereceivables 140 500Cr Aug 1 Balanceb/d 500Cr REQUIRED (a) Explaintheentryon31July2021intheallowanceforimpairmentoftradereceivablesaccount. [2] Acreditcustomer, JJLtd,whoowedSGTrading$800wasdeclaredabankrupt.On15July2022,SGTradingreceived,incash,$0.60foreachdollarowedbyJJLtd.Onthesameday, thebalancewaswrittenoffasuncollectible. REQUIRED (b) Preparejournalentryto recordthetransactionon15July2022.Narrationisnotrequired. [4] ThetradereceivablesbalanceofSGTradingfortheyearended31July2022was$12400. It is SGTrading’s policyto provideallowanceforimpairmentlossof tradereceivablesat5%ontradereceivables. REQUIRED (c) Calculatetheimpairmentlosson tradereceivablesfortheyearended31July2022. [2] (d) Preparejournalentrytorecord(c)on31July2022.Narrationisrequired. [2] (e) Stateandexplaintheaccountingtheoryneededfortherecordingofallowanceforimpairmentlossontradereceivables. [2] [Total:12] [TurnoverSGSS/POAP2/4N/Prelim/2022

4 3 3RCConsultancyprovidesthefollowingaccountbalancesfromitsbookson30June2022. $Officeequipment 23000Accumulateddepreciationofofficeequipment 9800Depreciationofofficeequipment 345Capital,1July2021 ?Drawings 6700Cashatbank 4640Consultancyfeesrevenue 96995Utilities 8800WagesandSalaries 25000Rentexpense 42000Tradereceivables 24330Allowanceforimpairmentoftradereceivables 330 REQUIRED (a) Calculatethecapitalbalanceon1July2021. [3] (b) Calculate3RCConsultancy’s profitfor theyearended30June2022. [1] Thefollowingerrorswerediscoveredon30Ju