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One hard accounting rerpot question?Here I show you one five star hard question about accounting, I have tried many ways to do but I still don't have the right result, so someone pls have me to do it, thank u so muchErnie’s, the sole proprietor is keen to extend his business to become as a soledistribution agent in the Hanoi area for Diamond floor titles. Ernie’s, on 1 July 2008decided to recruit a new business partner, Snow, to transform his sole proprietorenterprise into a partnership. Under an agreement with the manufacturers, Ernie andSnow purchases the Diamond floor tiles at a trade discount of 20% off list price andannually in May receives an agency commission of I% of his purchases for the yearended on the previous 31 March.For few months operation, the- partnership has obtained a gross profit of 40% on allsales. In a burglary in January 2009, the partnership lost inventory costing $4,000 aswell as many of his accounting records. However, after careful investigations, thefollowing information has been obtained covering the year ended 31 March 2009.(a) Assets and liabilities at 31 March 2008 were as follows:$Buildings: at cost 10,000provision for depreciation 6,000Motor vehicles: at cost 5,000provision for depreciation 2,000Inventory: at cost 3,200Trade accounts receivable (for sales) 6,300Agency commission due 300Prepayments (trade expenses) 120Balance at bank 4,310Trade accounts payable 4,200Accrued vehicle expenses 230(b) The partnership have been notified that the firm will receive an agencycommission of $440 on I May 2009.(c) Inventory, at cost, at 31 March 2009 was valued at an amount $3,000 more thana year previously.(d) In October 2008 inventory costing $1,000 was damaged by dampness and had tobe scrapped as worthless.(e) Trade accounts payable at 31 March 2009 related entirely to goods receivedwhose list prices totalled $9,500.(f) Discounts allowed amounted to $1,620 whilst discounts received were $1,200.(g) Trade expenses prepaid at 31 March 2009 totalled $80.(h) Vehicle expenses for the year ended 31 March 2009 amounted to $7,020.(i) Trade accounts receivable (for sales) at 31 March 2009 were $6,700.(j) All receipts are passed through the bank account.(k) Depreciation is provided annually at the following rates.Buildings 5% on cost;Motor vehicles 20% on cost.(l) Commissions received are paid directly to the bank account.(m)In addition to the payments for purchases, the bank payments were:Vehicle expenses 6,720Withdrawals on account 4,300Trade expenses 7,360(n) The firm is not insured against loss of inventory owing to burglary or damage toinventory caused by damp.You are required to: Prepare the income statement of the partnership for the yearended 31 March 2009 and a balance sheet on that date. Note. You are not givedetails of the profit sharing ratio, so there is no need to deal with partnership aspects.but the difficult here is the way we use to solve step by step in income statement, I don't have the equal in balance sheet because I can't solve those step in income statement ( +1Was this answer helpful?
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(VISITOR) AUTHOR'S NAME
Open
MESSAGE TIMESTAMP
20 december 2014, 15:21:42
AUTHOR'S IP LOGGED
190.72.5.72
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