3. John Moses is a sole trader who operates a business in Mandeville, Jamaica. O

Question

3. John Moses is a sole trader who operates a business in Mandeville, Jamaica. On May 31, 2014 the following Trial Balance was extracted from his accounting records Trial Balances at May 3L. 2014 Details DR CR Salee retums Stationery Curriage inwards ffice famiture 250,000 390,000 417.000 2.200,000 16,250 000 4,000,000 300,000 5.653,000 900,000 3,750,000 nsurance Cash al bank Kent Stock, June 1, 2013 Retum outwands Salaries Cash in hand Carriage outwards 375,000 4,500,000 600,000 500,000 150,000 6.975.000 Discount allowed Purchases 2 500,00 750,000 620,000 Creditors Commission receivable Discowmt received Electricity Capital Motor vehicles Accumulated depreciation on motor vehicles 10,000,000 4,000,000 42,447,000 42.447,0c0 Notes (1) Stock as at Mary 31. 2014 was $4,200,000. (n) Depreciation is lo lie clurged as lullows: Motor velitis ans e liiaiE almiit nine anatihe us (iii) A prowion for bal and doubtful debt isto be created equaling to two percent (2%) or debtors (iv) On May 31, 2014 S40,000 was ontstanding for rent, while insurance ot $50,000 related to 2015 (v) Carmiage inwards or s17.000 wa paed liw goods diat were to be raceived in Jamary 2015 Required; Prepare John Moses' Income Statement and Bakunge Shecl for the financial year ending May 3), 20)4 wW

Explanation / Answer

Workings -
Calculation of cost of goods sold

Carriage inward = 417000 - 17000(for 2015) = 400000

Calculation of Depreciation On Motor Vehicles

Calculation of Total rent expense

Calculation of Insurance Expense for 2014

Opening Stock $ 3,750,000.00 Add: Purchase $ 6,975,000.00 Add: Carriage in Ward $      400,000.00 Less: Return Outward $      375,000.00 Less: Closing Stock $ 4,200,000.00 Cost of Goods Sold $ 6,550,000.00

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