DETAILS
DR
CR
Premises
800,000
10% Mortgage
250,000
Retained earnings
40,000
Goodwill
100,000
Debtors
110,000
Creditors
65,000
General reserves
30,000
Management fees
30.000
Ordinary shares @ $0.50
200,000
5% Preference shares @ $1
200,000
Share premium
50,000
Motor vehicle
80,000
Prov. for depreciation on motor vehicle
10% Debenture
12,000
120,000
Mortgage interest
7,000
Debenture interest
5,000
Cost of sales
750,000
Closing stock
80,000
Insurance
20.000
Wages & salaries
60.000
Interim ordinary shares dividend
2.000
Bank
53.000
Sales
1.100.000
Commission received
4,000
2.084.000
2,084,000
Notes:
a. Provide for depreciation on motor vehicle at 5% on the reducing balance
b. Insurance is prepaid by $4,000 while wages and salaries is owing by $20,000
c. The goodwill should be written down by 25%