Q1 The following trial balance was extracted from the books of ABC Store on 31 December 20x5. DR CR $ $ Sales 223,940 Returns...

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Answer;
	Income statement of ABC store fir the year ended 31 december 20#5

	Revenues:
	Sales revenue		223940
	Less: sales returns
	return inwards	1900
	discount allowed	800
	Total revenues		221240
	Cost of goods sold
	opening stock	56000
	Add: purchases(80100-970-2970)	76160
	less: closing stock	12000	120160
	Gross Profit		101080

	Expenses
	rent and rates(60500-5000)	55500
	electricity(5800+650)	6450
	depreciation	10000
	other expenses(7500+780)	8280
	provision for doubt full debts	4570
	Total expenses		84800

	Net income before taxes		16280
	less: taxes		0
	Net income		16280


	Balance sheet of ABC stores
	Liabilities	Amt	Assets	Amt
	capital	185200	cash
	less: Drawings	9500	bank	110450
	net profit	16280	debtors(45700-5420-4570)	35710
	crerditors	29750	stock	12000
	Accrued expenses(650+780)	1430	motor vehicle(100000-40000)	60000
			prepaid rent	5000

		223160		223160

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	DR	CR
	$	$
Sales		223,940
Returns inwards	1, 900
Returns outwards		970
Discount allowed	800
Discount received		2,970
Purchases	80,100
Stock	56,000
Rent and rates	60,500
Electricity	5,800
Debtors	45,700
Creditors		29,750
Bank	110,450
Motor vehicle at cost	100,000
Accumulated depreciation for motor vehicle		30,000
Provision for doubtful debts		5,420
Other expenses	7,500
Capital		185,200
Drawings	9,500	________
	478,250	478,250

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