Question

The following trial balance has been extracted from the books of Mr Happy as at 31 December 2020. Account Debit £ Credit £ Cash 1,500 Allowances for Trade receivables 3,000 Bank interest 6,000 Bank overdraft 2,000 Capital 70,000 Accumulated depreciation - fixtures s & fittings 8,000 Accumulated depreciation - motor vehicles 7,500 Drawings 10,000 Fixtures & fittings at cost 40,000 Heat, Light & Power 6,000 Insurance 5,000 Long term Loan - from JK Ltd 40,000 Motor vehicle at cost 30,000 Purchases 500,000 Rates 7,000 Salaries Sundry expenses 48,000 45,000 Sales 700,000 Inventory (opening) 100,000 Trade Payables 48,000 Trade Receivables 80,000 878,500 878,500 Mr Happy has given you the following information: 1. Inventory at 31st December 2020 amounted to £75,000. 2. No depreciation has yet been provided for the year. The depreciation policy is to write off the cost of motor vehicles on a reducing balance basis at 25% per annum and to charge depreciation on the fixtures and fittings on a straight-line basis at the rate of 20% per annum. 3. Rates estimated at £500 relating to the year ended 31st December 2020. have not been paid before the year end and are not reflected in the trial balance. 4. Insurance of £400 has been paid in advance. 5. The allowances for trade receivables should amount to 5% of trade receivables.​

Answer 1

hfydtdhfhchfgdhdgdgdhdhdjslshdghx