1. You are provided with the Trial Balance of H. Tomas Inc.

for the year ended

October 31, 2013.
H Tomas Inc.
Trial Balance at October 31, 2013
Purchases and Sales
Sales Returns and Purchases Returns
Carriage-Inwards
Carriage-Outwards
Commissions Received
Discounts Allowed and Received
Telephone Expense
Electricity
Rent and Taxes
Insurance
Miscellaneous Expenses
Salaries & wages
Inventory at 1st November 2009
Provision for Bad Debts
Bank Overdraft
Motor Vehicle at cost
Machinery at Cost
Furniture/Fittings at Cost
Premises at cost
Provision for Depreciation:
Motor Vehicles
Machinery
Furniture/Fittings
Accounts Receivable and Accounts Payable
H Tomas, Capital Account
H Tomas, Drawings Account
Totals

Dr
210,820
3,600
5,500
7,395
2,850
4,620
10,250
5,750
13,000
2,395
66,250
45,800

CR
475,970
5,920

20,500
6,890

2,000
30,250
90,000
78,000
60,500
172,400

58,550
20,000
857,680

48,000
35,000
20,700
62,450
150,000
857,680

REQUIRED: Taking the following adjustments at October 31, 2013 into account, prepare the:
(A) Income Statement in vertical style for the year ended October 31, 2013;
(B) classified Balance Sheet in the order of permanence, as at October 31, 2013:
(i) Inventory at October 31, 2013 : $59,625.
(ii) Rent amounting to $7,200 was due at October 31, 2013.
(iii) Insurance premium of $3,000 was Prepaid to January 31, 2014.
(iv) Depreciation must be provided for 2010 as follows:
1. Furniture/Fittings 10% per annum on the reduced balance;
2. Machinery at 15% per annum on cost;
3. Motor Vehicles at 20% per annum on cost; and
4. Premises by $11,000 per annum.
(v) Electricity bill due and unpaid $850 and wages accrued $3,800.
(vi) The Provision for Bad Debts is to be reduced to 2% of Debtors.

Frost, Greg and Ali share profits and Losses in the ratio 2:4:2. The following represents their
Trial Balance on December 31, 2012:
$
$
Purchases and Sales ......................................................................................120,510...........203,163
Returns In and Out ...........................................................................................1, 530..................490
Carriage Inwards ..............................................................................................1, 025
Carriage Outwards ............................................................................................1,814
Commissions Received .............................................................................................................7,405
Discount Allowed and Received ......................................................................1, 480...............2,175
Faxes and Telephone Expense ..........................................................................3,582
Electricity Expense ...........................................................................................2,460
Rates and Taxes ................................................................................................4,256
Insurance Expense .............................................................................................8211
Miscellaneous Expenses .................................................................................13,829
Salaries ..........................................................................................................135,912
Inventory (Jan 1, 2012) ...................................................................................26,744
Rent Received ...........................................................................................................................3,000
Bank Overdraft..........................................................................................................................7,100
Motor Vehicles at cost ...................................................................................52, 000
Machinery at cost ............................................................................................45,100
Furniture and Fittings at cost ..........................................................................52,000
Premises at cost .............................................................................................100,000
Provisions for depreciation:
Motor vehicle..15 000
Furniture and Fittings.....12 500
Machinery 9 000
Mortgage11 980
Debtors and Creditors .....................................................................................28,000.............25,140
Provisions for bad debts..12 500
Current Accounts:
Frost .............................................................................................................................5,000
Greg.............................................................................................................................11,000
Ali ...............................................................................................................................15,000
Capital Accounts:
Frost ............................................................................................................................80,000
Greg ............................................................................................................................60,000
Ali .............................................................................................................................125,000
Drawings:
Frost ......................................................................................................4,000
Greg.......................................................................................................2,000
Ali .........................................................................................................1 000
______
______
Notes:
i)
ii)
iii)
iv)
v)
vi)
vii)
viii)

605,453
======

605,453
======

Inventory (Dec 31, 2012) : $5,175

Electricity expense outstanding was $ 250
Insurance prepaid was $ 375
Depreciate machinery at 15% and Motor vehicles at 20% reducing balance and Furniture
10% on cost.
Increase provisions for bad debts to $15 000
Interest on Drawings: Frost-$150; Greg-$225; Ali-$75
Each partner is to be paid 15% Interest on Capital
Salaries are to be paid to Greg $5,000 and Ali $3,000

REQUIRED:
(A) In vertical style, prepare the financial statements for the year ended December 31, 2012.

Julians Home Varieties has separate departments for Hardware, Plumbing and Electrical.
The following balances were extracted from its books for the year ended December 31, 2013.

Purchases:

Hardware
Plumbing
Electrical

Sales:

Hardware
Plumbing
Electrical

Inventory (1/1/13)

Hardware
Plumbing
Electrical

Commissions Received
Discounts Received
Returns Inwards
Salaries and Wages
Discounts allowed
Rent and Rates
Electricity
Advertising
Delivery expenses
Depreciation of fixed assets
General expenses

$
200,300
170,500
110,000

350, 000
225, 000
125,000
30,400
26,400
15,700
12 000
28 000
3 900
55, 260
40, 000
60, 000
4, 000
7,508
5,280
3,252
9,900

Addition information:
o Inventory (31/12/13)

Hardware
Plumbing
Electrical

$25, 900
$17, 700
$10, 150

o Salaries and wages are to be allocated as follows: Hardware 35%; Plumbing 25%;
Electrical 40%.
o Commissions and discounts received are to be apportioned in the ratio of purchases of the
departments
o Discounts allowed and Advertising are to be apportioned in the ratio of turnover of each
department.
o Rent and Rates, and Electricity are to be apportioned in the ratio of departmental floor
areas occupied as follows:
Hardware
5,500 sq metres;
Plumbing
1,500 sq metres;
Electrical
3,000 sq metres.
o General expenses are allocated as follows: Hardware 30%; Plumbing 30% and Electrical
40%
o All other expenses are to be apportioned equally among departments.

REQUIRED:
Prepare the Departmental Income Statement (Trading & Profit and Loss Account) (in good
style) for the year to December 31, 2013.

N.B. (Please round off to the nearest dollar where necessary)