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The following trial Balance was extracted from the books of A

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The following trial Balance was extracted from the books of A.N. Feshu as at 31 st May 2020

 

	Dr. $	Cr. $
Sales		30,000
Purchases	17,000
Stock at start	4,000
Carriage outwards	200
Carriage inwards	50
Returns inwards	200
Returns outwards		500
Wages and Slaries	7,900
Electricity and rates	2,050
Insurance	500
Bad debts	130
Stationery	250
Plant and machinery	3,000
Furniture and fixtures	1,400
Provision for bad debts		400
Debtors	5,000
Ceditors		5,500
Cash in Bank	840
Cash in hand	30
Drawings	2,000
Capital		6,450
Bank Loan		1,000
Comission received		600
Discount allowed	100
Discount received		200
	44,650	44,650

 

1 Closing stock was valued at 57.000.

2 Wages due but not paid $256.

3 Insurance prepayment $120.

4 Prepayment &rates $40 but electricity in arrears $110.

5 Commissions earned but not yet collected $200.

6 A further bad debts of $500 is to be written-off.

7 Provision for had debts should be reduced to 5 percent ofdebtors.

a Draw up a Trading and Profit and Loss Account for A. N. Feshu after making adjustments for the year ending 31st May 2020.

b Draw up a classified Balance Sheet for A. N. Feshu showing the adjustments in their appropriate sections as at 31 May 2020. c Draw up a Work Sheet.

c Draw upa Wark Sheet

 

Q2.

J. Blane commenced business on 1 January 2015 and prepares her financial statements to 31 December every year. For the year ended 31 December 2015, bad debts written off amounted to $1,400. It was also found necessary to create an allowance for doubtful debts $2,600.

In 2016, debts amounting to $2,200 proved bad and were written-off. J. Sweeny, whose debt of $210 was written off as bad in 2015, settled her account in full non 30 November 2016. As at 31 December 2016 total debts outstanding were $92,000. It was decided to bring the provision up to 4% of this figure on that date.

In 2017, $3,800 of debts were written-off during the year, and another recovery of $320 was made in respect of debts written-off in 2015. As at 31 December 2017, total debts outstanding were $72,000. The allowance for doubtful debts is to be changed to 5% of this figure.

You are required to show the years 2015, 2016 and 2017, the

A. Bad Debts Account.

B. Bad Debts Recovered Account

C. Allowance for Doubtful Debts Account.

D. Extract from the Income Statement.