Question

Section B: Long Questions (Total 75 marks) BI. The following trial balance was extracted from the books of Mac Limited as at 31 October 2019: Trial Balance as at 31 October 2019 Dr. Cr. 1.476.948 4,349,474 66.554 18.600 25.000 884,500 53,000 13,000 636,000 18,000 30,000 332,400 553,800 Purchases Sales Returns inwards Returns outwards Insurance Wages and salaries Electricity Telephone charges Rent and rates Carriage Debenture interest paid Advertising expenses Trade receivables Trade payables Discount received Cash at bank Allowance for doubtful debts, at 1 November 2018 Machinery, at cost Motor vehicles, at cost Accumulated depreciation, at 1 November 2018 - Machinery - Motor vehicles Inventory, at 1 November 2018 5% Debentures, repayable on 1 July 2030 General reserve Ordinary share capital Retained profits, at 1 November 2018 628,000 20,000 2,364,300 25,400 336,000 605,000 73.840 271.688 255,000 1.200,000 16.000 600.000 446,500 7,649,502 7,649,502 The following additional information is available: (1) Inventory at 31 October 2019 was valued at cost of $204,000. Advertising expenses of S17.600 were unpaid and unrecorded at the year end. Wages and salaries included $22.000 paid for November 2019 in advance. Carriage included $2.280 freight charges for goods purchased from overseas suppliers. The remaining were carriage outwards. (5) Allowance for doubtful debts at 31 October 2019 was estimated to be $33,330. Page 4 of 6

Answer 1

Adjusted Trial balance
Details	Unadjusted TB		Adjustment		adjusted TB
	Debit ($)	Credit($)	Debit ($)	Credit($)	Debit ($)	Credit($)
Purchased	14,76,948		2,55,000	2,04,000	15,27,948
Sales		43,49,474				43,49,474
Return Inwards	66,554				66,554
Return Outward		18,600				18,600
Insurance	25,000				25,000
Wages and Salaries	8,84,500			22,000	8,62,500
Electricity	53,000				53,000
Telephone charges	13,000				13,000
Rent & Taxes	6,36,000				6,36,000
Carriage Outward	18,000			2,280	15,720
Carriage inward			2,280		2,280
Debenture Interest	30,000		30,000		60,000
Advertising Exp	3,32,400		17,600		3,50,000
Trade Receivable	5,53,800			1,500	5,52,300
Trade Payable		6,28,000		17,600		6,45,600
Discount received		20,000				20,000
Cash at Bank	23,64,300				23,64,300
Allow for Doubtful debt		25,400	1,500	9,430		33,330
Machiner at cost	3,36,000			8,500	3,27,500
Motor Vehicle at cost	6,05,000				6,05,000
Accumuated depreciaiton- Machinery		73,840		65,500		1,39,340
Accumuated depreciaiton- Motor Vehicle		2,71,688		83,328		3,55,016
Inventory	2,55,000		2,04,000	2,55,000	2,04,000
5% Debentures		12,00,000				12,00,000
General reserve		16,000		55,000		71,000
Share Capital		6,00,000				6,00,000
Retained Profit & Salaries		4,46,500	55,000			3,91,500
Prepaid Wages			22,000		22,000
Bad debt			9,430		9,430
Repairs			8,500		8,500
Depreciation Exp			1,48,828		1,48,828
Income Tax expenses			1,00,000		1,00,000
Income Tax payable				1,00,000		1,00,000
Interest payable				30,000		30,000
Total	76,49,502	76,49,502	8,54,138	8,54,138	79,53,860	79,53,860

Balance Sheet
Asset	Amnt ($)
Cash at Bank	23,64,300
Trade receivable	5,52,300
Allowance of Doubtful Debt	-33,330
Inventory	2,04,000
Prepaid wages & Salaries	22,000
Current Assets	31,09,270
Machinery	3,27,500
Accumulated Depreciation- Machinery	-1,39,340
Motor Vehicles	6,05,000
Accumulated Depreciation- Vehicle	-3,55,016
Total Assets	35,47,414
Liabilities + Equity
Trade payable	6,45,600
Income Tax payable	1,00,000
Interest Payable	30,000
Current Liability	7,75,600
Long term Debt
5% debentures	12,00,000
Equity
Share capital	6,00,000
General Reserve	71,000
Retained profits	3,91,500
Net Income	5,09,314
Total Liabilities + Equity	35,47,414