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Hyper Star Traders a sole proprietorship business located

Mr. Ali is running “ Hyper Star Traders” 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 ofgoods 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 received on 7th January 2010). Mr. Ali also estimates that 5% of the amount will not be collect able from sundry debtors. House rent allowance Rs. 5,000 has been paid on 31st December from his personal account, on thesame 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:

ParticularsRs.                                                                     Particulars Rs.

Opening stock120,000                                                Bankbalance 36,000

Sundry Debtors100,000                                             Bills payable 20,000

Long term Investments60,000                              Returns outwards 4,800

Returns inwards8,000                                               Commission 2,000

Purchases680,000                                                      Sales 924,000

Cash in hand4,000                                                      Interest received 800

Bills receivable44,000                                            Sundry Creditors 160,000

Carriage out3,600                                                    Salaries 48,000

Insurance paid2,800                                              Wages 45,200

Required:

A. Pass necessary adjusting entries.(15 marks)

B. Prepare the Income statement of Hyper Star Tradersfor the year ending on

31st December,2009. (15 marks)

C. Prepare the Balance sheet of Hyper Star Traders as on31st December, 2009.

May 01 2018 View more View Less

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