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Question B2 Pigeon, a furniture trading company, extracted the following balances from its ledger on...

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Accounting

Question B2

Pigeon, a furniture trading company, extracted the following balances from its ledger on 31 December 2017:

RM RM

Debit Credit

Purchases 643,000

Sales 730,900

Returns outwards 3,920

Returns inwards 4,100

Delivery truck 82,100

Carriage outwards 9,100

Inventory, 1 January 2017 70,800

Computer 5,800

Cash at bank 32,100

Salaries and wages 82,300

Rent and rate 67,000

Electricity bills 5,500

Phone and fax bills 4,400

Display furniture 20,200

Accounts receivable 24,100

Accounts payable 73,410

Motor expense 4,300

Capital (opening balance) 281,970

Cash in hand 2,400

Drawings 33,000 ________

1,090,200 1,090,200

The following additional information as at 31 December 2017 is available:

  1. Inventory was valued RM263,000

Required:

(a) Prepare an income statement for the year ended 31 December 2017, and (12 marks)

(b) the statement of financial position (balance sheet) as at that date. (8 marks)

Question B3

Explain the differences of following items:

(a) Expense and drawing. (3 marks)

(b) Net asset and Non-current assets. (3 marks)

(c) Revenue expenditure and capital expenditure. (4 marks)

(Total= 50 marks)

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