ACC106

WORKED EXAMPLE FINANCIAL STATEMENTS

QUESTION

The following Trial Balance was extracted from the book of Kedai Makan Keluarga, a
restaurant business owned by Encik Mustapha as at 31 December 2016:

Debit Credit

RM RM

Capital OE, BS 145100

Drawings OE, BS 2150
Cash in hand A, BS 10850
Bank overdraft L, BS 4000
Return inward R, IS 3500
Insurance on premises E,IS 6400
Salaries of employees E,IS 13400
Telephone expenses E,IS 1600
Discounts received R, IS 3850
Land A, BS 61000
Investment A, BS 23000
Machinery A, BS 53000
Fixtures and fittings A, BS 24000
Return outward E,IS 1450
Rent revenue R, IS 5300
Inventories, 1 January 2016 E,IS 8800
Sales R, IS 93000
Purchases E,IS 62700
Accounts Payable L, BS 18900
Accounts Receivable A, BS 12000
Prov for depreciation for machinery L, BS 10250
Prov for depreciation for fixtures and fittings L, BS 7750
Miscellaneous expenses E,IS 4000
Utilities expenses E,IS 2200
Printing and stationery E,IS 1000
---------- -----------
289600 289600
====== ======

Additional information is as follows:

i. Inventories as at 31 December 2016 was valued at RM 11000. A, IS & BS

ii. machinery was depreciated at the rate of 20% per annum by using straight line method.
Dep = 20% x 53000 = 10600 IS & BS

iii. fixtures and fittings were depreciated at the rate of 8% per annum on cost.
Dep = 8% x 24000 = 1920 IS & BS

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iv. Encik Mustapha withdrew RM 2500 cash from the business to buy jewelry for his wife
and presents for his children. DRAWINGS deduct from cash. both BS

v. RM 1900 of rent revenue was not yet received. Accrued revenue. IS & BS

vi. RM 1300 of the utilities expenses and RM 600 of telephone expenses were still unpaid.
accrued expenses IS & BS

vii. Encik Mustapha took out RM 700 of the business goods for personal use. . DRAWINGS
deduct from purchases. IS & BS

Required:
a. Prepare the Statement of Profit or Loss for Kedai Makan Keluarga for the year
ended 31 December 2016.

b. Prepare the Statement of Financial Position (Balance Sheet) for Kedai Makan
Keluarga as at 31 December 2016.

IS = Statement of Profit or Loss

BS = Statement of Financial Position (Balance Sheet)

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 Kedai Makan Keluarga
Statement of Profit or Loss for the year ended 31 December 2016

RM RM
Sales 93,000
Less: return inwards 3,500
--------
89,500

Cost of Goods Sold

Opening inventories 8,800
Add Purchases 62,700
Less Drawings 700
Less return outward 1,450
---------
Cost of goods available for sale 69,350
Less Closing inventories 11,000 58,350
Gross profit 31,150

Add income
Discount received 3,850
Rent revenue(5300 +1900) 7,200 11,050
42,200
Less expenses
Insurance 6,400
Salaries of employees 13,400
Telephone(1600 + 600) 2,200
Miscellaneous expenses 4,000
Utilities expenses (2200 + 1300) 3,500
Printing and stationery expenses 1,000
Depreciation-furniture 1,920
Depreciation-machinery 10,600 (43,020)
Net loss (820)

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 Kedai Makan Keluarga
Statement of financial Position as at 31 December 2016

Non current Assets Cost Acc. Depreciation NBV

RM RM RM
Land 61,000 - 61,000
Machinery 53,000 20,850 32,150
Fixtures and fittings 24,000 9,670 14,330

Investments
Investments 23,000

Current assets RM RM
Inventories 11,000
Accounts receivable 12,000
Cash(10850-2500) 8,350
Accr rent revenue 1,900 33,250
163730

Financed by
Capital 145,100

Less: Net loss / (820)

Less: Drawings(2150+2500+700) (5,350)

138,930

Current liabilities
Accounts payable 18,900
Bank overdraft 4,000
Accr utilities 1,300
Accr telephone 600 24,800
163730