Topic: EconomicsTrade

Last updated: November 25, 2019

The 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:
Capital 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

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.

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