Question 1

Sam Brown’s accounting period is from January 1 to December 31. The following provides information for three    periods.

Year                     Debtor Balances                Provision for Doubtful Debts

2000                             20,000                                            5%

2001                             30,000                                            6%

2002                             25,000                                            4%


Write up the Provision for Doubtful Debts Account for each of the three years ending December 31 2000 to 2002.


Question 2

Novelty Chemicals bought a Motor Vehicle for $110,000 on January 5, 2002. The estimated useful life of the vehicle is ten years. The disposal value is estimated at $10,000. Annual depreciation is on the straight line method.

Required for years 2002, 2003 and 2004:

(a)The accumulated Depreciation account- Motor Vehicle

(b)The Balance Sheet extracts for motor vehicle and its related depreciation.

(c)The Profit and Loss accounts extracts for annual depreciation


 Question 3

The Trial balance of Wholesome Groceries as at December 31, 2005 is shown below.


Closing Stock $18,000

Rent paid in advance $4,000

Wages and Salaries owing  $3,400

Insurance owing $600

Provision for doubtful debt to be created $600

Depreciation on machinery and equipment for the period $3,000

Prepare the Following for Wholesome Groceries:

1. The Trading and Profit and Loss account for the period ending December 32, 2005

2. The Balance Sheet as at December 31, 2005.




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