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At the year end the business has: Furniture Rs40000

Mr. Ali is running "Hyper StarTraders" a sole proprietorship business located at the Mall Road, Lahore. At the year end the business has:

Furniture Rs.40,000

Plant 200,000

Capital 280,000

On 30th November 2009 Mr. Ali submitted a tender for sale of goods of Rs. 20,000 which is likely to be confirmed shortly. Bank debited service charges Rs.150 and interest on loan Rs. 500 and credited dividend for Rs.2,000 in the month of December (intimation from bank was receivedon 7th January 2010). Mr. Ali also estimates that 5% of the amount will not be collectable from sundry debtors. House rent allowance Rs. 5,000 has been paid on 31st December from his personal account,on the same date stock was valued at Rs. 200,000 and plant Rs.160,000 because of its wear and tear.

The following balances (in the books of Hyper Star Traders) are also given along with above information as on 31st December 2009:

Particulars Rs. Particulars Rs.

Opening stock 120,000 Bank balance 36,000

Sundry Debtors 100,000 Bills payable 20,000

Long term Investments 60,000 Returns outwards 4,800

Returns inwards 8,000 Commission2,000

Purchases 680,000 Sales924,000

Cash in hand 4,000 Interest received 800

Bills receivable 44,000 Sundry Creditors 160,000

Carriage out 3,600 Salaries48,000

Insurance paid 2,800 Wages45,200
Required:

A. Passnecessary adjusting entries. (15 marks)

B. Prepare the Income statement of Hyper Star Traders for the year ending on 31st December, 2009. (15 marks)

C. Preparethe Balance sheet of Hyper Star Traders as on 31st December, 2009.(10 marks)

May 02 2018 View more View Less

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