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The trial balance of Zach Ltd as at 3I December 2017 was as follows Share capital 10000 $20 Ordinary shares 200000 Purchases and Sales 1220000 2000000 Debtors and Creditors

The trial balance of Zach Ltd. as at 3I December 2017 was as follows: Share capital (10,000 $20 Ordinary shares) 200,000 Purchases and Sales 1,220,000 2,000,000 Debtors and Creditors 400,000 140,000 Profit and loss 1 January 2017 380,000 Sales returns 40,000 Buildings at cost 800,000 Plant at cost 1,000,000 Provision for depreciation: Plant 400,000 Buildings 40,000 Purchases returns 80,000 Selling expenses 140,000 Bank 160,000 10% Debentures 600,000 Stock 1 January 2017 300,000 Provision for bad debts 20,000 Operating expenses 180,000 Administrative expenses 140,000 Suspense account _______ 200,000 4,220,000 4,220,000 Additional information: 1. Stock at 31 December 2017 was 360,000. 2. Sales returns of 20,000 have been entered in the sales day book as if they were sales. When this error was discovered, the debtors account had been corrected but the sales figure was not rectified. 3. 5000 new shares were issued during the year at $32. The proceeds have been credited to the suspense account. 4. A fully depreciated plant which cost 200,000 was sold during the year. No other entries except bank have been made. The remaining balance on the suspense account after (2 and 3) above represents the sale proceeds. 5. A debtor of 20,000 has been declared bankrupt. A general provision is required at 5% of debtors. 6. Rates of 30,000 paid in December covering half year to 31 March 2018 have not been entered in the books. 7. Debenture interest has not been paid. 8. Depreciation on plant is at 10% on cost and buildings at 2% on cost. 9. The directors propose to pay a dividend of $2 per share and transfer 20,000 to the general reserve. 10. Corporation tax at a rate of 32'/2% on profits is estimated to be 90,000. Required: (a)Suspense account for the year ended 3I December 2017 (3 marks) (b)Trading, profit and loss ccount for the year ended 31December 2017. (10 marks) (c) Balance sheet as at 31 December 2017.

May 22 2020 View more View Less

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