Question

The following trial balance belongs to Kipevu trades as at 30th June, 2004

KIPEVU TRADERS Trial balance as at 30th June 2004
	Dr.(shs)	Cr. (shs)
Stock on 30/6/03	40,000
Capital		162,300
Purchase and sales	35,000	70,000
Drawings	6,000
Furniture and fittings	20,000
Motor vehicles	150,000	12,000
Debtors and creditors	8,000	4,800
Returns	2,000	800
Discount	900
Wages and salaries	15,000
Rent	3,500
Insurance	2,100
Commission	400
Bank		3,000
Cash	6,000
	252,900	252,900

Required :

1. Prepare a trading profit and loss account and
2. Prepare a balance sheet as at 30th June 2004

Answer 1

KIPEVU TRADERS Dr               Trial balance as at 30th June 2004              Cr
Opening stock Add purchases Cost of goods as Less returns outward	4,000 35,000 39,000 4,800	Sales Less sales returns Net sales	70,000 2,000            68,0000
	34,200
Gross profit c/d	33,800
Expenses		Gross profit b/d Add discount	33,800 800
Discount Wages Rent Insurance Commission	900 15,000 3,500 2,100 400
			34,600
	21,900
Net profit c/d	12,700	Net profit b/d	34,600
	34,600		12,700

KIPEVU TRADERS BALANCE SHEET As at 30th June 2004
FIXED ASSETS		Capital Less drawings Add profit	162,000 6,000 12,700
Motor vehicles	150,000
Furniture	20,000
170,000		Net profit	169,000
CURRENT ASSETS		CURRENT LIABILITY
Stock	34,200	Creditors	12,000
Debtors	8,000
Cash	6,000
48,200
218,000		218,200