GENIUS Business School

Exercise - 10.2 (P. 27)

Workings
(i) Wages and Salaries Account
$ $
• Bank 65,840 • SOPL 66,660
• Balance c/d 820
66,660 66,660
• Balance b/d 820

(ii) Rent Payable Account

$ $
• Bank 11,920 • SOPL 12,220
• Balance c/d 300
12,220 12,220
• Balance b/d 300
 GENIUS Business School

Exercise - 10.2 (P. 27)

Workings
(iii) Height & Light Account
$ $
• Bank 2,840 • SOPL 2,760
• Balance c/d 80
2,840 2,840
• Balance b/d 80

(iv) Commission Receivable Account

$ $
• Bank 1,210
• SOPL 1,351 • Balance c/d 141
1,351 1,351
• Balance b/d 141
Exercise - 10.2 (P.27)
B Kouzalai
(a) Statement of Profit or Loss for the year ended
30 June 20X7

$ $
• Sales/Revenues 286,370
• Less: Cost of Goods Sold
• Opening Inventory 19,223
• Purchases 129,860

• Closing Inventory (13,980)

(135,103)

Gross Profit 151,267

Income
• Commission Receivable (1,210 + 141) 1,351
Expenses
• Wages and Salaries (65,840 + 820) 66,660
• Rent (11,920 + 300) 12,220
• Heat & Light (2,840 - 80) 2,760
• Stationery 3,650
• Motor Vehicle Expenses 1,620
(86,910)
Net Profit for the year 65,708
 GENIUS Business School

(b) Statement of Financial Position (Extract) at

30 June 20X7
$ $
Current Assets
• Closing Inventory 13,980
• Trade Receivables 9,430
• Prepaid - Heat & Light 80
• Commission Receivable in arrears 141

Current Liabilities 23,631

• Trade Payables 7,620
• Accrued - W & S 820
• Accrued - Rent Payable 300
(8,740)

Working Capital (or) Net Current Assets 14,891

(c) Difference between Accruals & Prepayments

Accrual
An expense accrual is an amount owing for an accounting
period, which remains unpaid at the end of that period. Expense
accrual is also known as “accrued expense.”
Prepayment
An expense prepayment is an amount paid during the current
financial period to cover an expense for the next financial
period. Expense prepayment is also known as “prepaid expense”.