Topic: EconomicsTrade

Last updated: November 25, 2019

QUESTION ONEThe following are the ledger account balances as at 31st December 2017, of T. Fungamwango a Sole Trader based in the Small Mining Town of Kalulushi: DR CR K KCapital 20,500 Purchases 46,500 Sales 60,900 Repairs to building 848 Motor Vehicles 950 Motor Vehicle expenses 318 Land and Buildings 10,000 Balance at Bank 540 Furniture and Fittings 1,460 Wages and Salaries 8,606 Discount allowed 1,061 Discount received 814 Drawings 2,400 Rates and Insurance 248 Bad Debts 359 Provision for bad debts 140 Trade Debtors 5,213 Trade Creditors 4,035 General expenses 1,586 Inventory at 1st January 2016 6,300 86,389 86,389 The following matters are to be taken into consideration:1. Inventory on 31st December 2017 was counted and was valued at K8,800;2. Wages and salaries outstanding at 30th December 2017 was K318;3. Rates and Insurance paid in advance at 30st December 2017 was K45;4.

The provision for bad debts is to be reduced to K100;5. During 2017 withdrew T. Fungamwango goods valued at K200 for his own use. No entry has been made in the books for the withdrawal of these goods;6. The expense ‘Repair to buildings K848’ includes K650 in respect of alterations and improvements to the buildings (Capital expenditure);7. One third (1/3) of the Car expenses represent the cost of Fungamwnngo’s motoring for private use as distinct from business purposes.Required:Prepare an S

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