- 20 Marks
FA – May 2022 – L1 – SB – Q3 – Accounting from Incomplete Records
Calculate sales, purchases, prepare the statement of profit or loss, and the statement of financial position for a business with incomplete records.
Question
Amaka runs a pharmaceutical shop. She does not keep complete accounting records.
The following summary was extracted from her bank account for the year ended December 31, 2020:
| ₦ | ₦ |
|---|---|
| Balance b/d | 907,500 |
| Cheques from customers | 17,817,250 |
| Cash sales | 1,470,375 |
| Total Receipts | 20,195,125 |
| Payments | |
| Payment to trade suppliers | 10,316,375 |
| Electricity | 408,750 |
| Telephone | 135,000 |
| Rent | 810,000 |
| Advertising | 536,250 |
| Furniture and fittings | 1,956,250 |
| Insurance | 354,750 |
| Motor vehicle expenses | 793,500 |
| Drawings | 2,278,625 |
| Balance c/d | 2,605,625 |
| Total Payments | 20,195,125 |
Additional Information:
| January 1, 2020 | December 31, 2020 |
|---|---|
| Inventory of Drugs: ₦1,200,000 | ₦1,523,625 |
| Trade Receivables: ₦991,125 | ₦1,504,500 |
| Trade Payables: ₦599,250 | ₦916,875 |
| Motor Vehicles: ₦2,912,500 | |
| Shop Fittings: ₦1,575,000 | |
| Motor Vehicle Expenses Owing: ₦162,000 | ₦109,125 |
| Insurance Paid in Advance: ₦66,375 |
Depreciation of motor vehicles is at 20% per annum, and the furniture and fittings at 10% per annum. Depreciation is calculated using the reducing balance method.
Required:
(a) Calculate sales and purchases for the year ended December 31, 2020. (10 Marks)
(b) Prepare the statement of profit or loss for the year ended December 31, 2020. (5 Marks)
(c) Prepare the statement of financial position as at December 31, 2020. (5 Marks)
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