Using following information, Prepare Profit & Loss Account and Balance Sheet. Pr

Question

Using following information, Prepare Profit & Loss Account and Balance Sheet.

Precision Engineering TRIAL BALANCE AS AT 30 JUNE 2014 DR CR ACCOUNT NUMBER ACCOUNT 22 00 Bank Debtors Stock 101 102 103 104 Prepaid Rent Expense 151 Equipment 151A Accumulated Depreciation Equipment 201 Creditors 251 301 Capital - K Bates 5 800 85 00 28 00 100 00 7 600 35 000 50 000 98 900 Bank Loan * 57 000 Drawings Sales 401 555 000 500 Discount Expense 700 501 Cost of Sales 350 000 10 00 2 00 86 000 502 Administration Expenses 503 Interest Expense Wages TOTALS 504 746 500 746 500

Explanation / Answer

profit and loss account Sales 555,000 less:Discount expense 700 Net sales 554,300 less cost of sales 350,000 Gross profit 204,300 operating expense Administration expense 10,000 wages 86,000 96,000 income before interest 108,300 interest expense 2,000 Net income 106,300 Balance Sheet Assets Bank 22,000 Debtors 5,800 stock 85,000 prepaid expense 28,000 total current assets 140,800 fixed assets Equipment 100,000 lessAccumulated depreciation 7,600 92,400 total assets 233,200 liabilities & Stockholders Equity Creditors 35,000 Bank loan 50,000 Total liabilities 85,000 Stockholders Equity Capital -K baters 148200 148,200 total liabilities and stockholders equity 233,200

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