question 3 the trial balance of hair we are a beauty supplies store is shown below t 632856
Question 3
The Trial Balance of “Hair We Are” a beauty supplies store is shown below.
Trial Balance
as at June 30, 20X7
|
ACCOUNT NAME |
$ |
$ |
|
Sales |
|
425,000 |
|
Inventory @ July 1, 20X6 |
45,000 |
|
|
Purchases |
190,000 |
|
|
Wages & Salaries |
87,500 |
|
|
Telephone |
14,500 |
|
|
Water Rates |
10,800 |
|
|
Electricity |
20,600 |
|
|
Discount Allowed / Discount Received |
3,900 |
6,600 |
|
Sales Return / Purchases Return |
9,000 |
12,300 |
|
Rental Income |
|
72,000 |
|
Land |
80,000 |
|
|
Buildings |
130,000 |
|
|
Fixtures & Fittings |
50,000 |
|
|
Provision for Depreciation @ July 1, 20X6: |
|
|
|
Buildings |
|
26,000 |
|
Fixtures & Fittings |
|
9,500 |
|
Carriage Inwards |
3,400 |
|
|
Carriage Outwards |
2,900 |
|
|
Cash |
3,700 |
|
|
Bank |
16,250 |
|
|
Accounts Receivable / Accounts Payable |
127,600 |
49,200 |
|
Short-term Loans |
|
125,600 |
|
Drawings |
7,400 |
|
|
Capital |
________ |
76,350 |
|
TOTAL |
$802,550 |
$802,550 |
The following information concerning the operation of “Hair We Are” is also available:
§ Closing inventory on June 30, 20X7 was $52,000.
§ Wages of $12,000 was owed at June 30, 20X7.
§ Electricity of $3,000 was prepaid at June 30, 20X7.
§ The business had the following depreciation policy:
Land: 0%
Buildings: 2.5% per year of the cost of the asset.
Fixtures and fittings: 8% per year of the net book value of the asset.
Required:
- Prepare the Income Statement of “Hair We Are” for the year ended June 30, 20X7 (7 marks)
- Prepare the Balance Sheet as at June 30,20X7. (6 marks)
- Discuss the purpose of presenting the final accounts in a business. (3 marks)
- Discuss the accounting relevance of the accrual and matching principles. ( 3 marks)
Question 3 The Trial Balance of “Hair We Are” a beauty supplies store is shown below. Trial Balance as at June 30, 20X7 ACCOUNT NAME $ $ Sales 425,000 Inventory @ July 1,