Wananchi Pools Ltd. set up a business on 1 July 1999 to sell snooker tables of a standard size and quality. The company began with Sh.600,000 in the bank. The tables are purchased for Sh.5,400 each and sold for Sh.7,500 each. A friend of the managing director introduced ART Ltd. a hire purchase company to Wananchi Pools Ltd. ART requires a deposit of Sh.2,100 followed by 18 months instalments of Sh.375 each, the first one payable one month after purchase. Wananchi Pools Ltd. decided to deal in hire-purchase business on terms and conditions to those ART on deposits and instalments.
During the year ended 30 June 2000, Wananchi Pools Ltd. bought a total of 300 tables and sold 210 of them. Hire purchase sales were 12 in April 2000, 20 in May 2000 and 30 in June 2000, but 2 of those sold in April were repossessed in June with the deposit and one instalment having been paid. One of the repossessed tables was damaged and had to be repaired for Sh.1,800 while the other one was hardly damaged and could be treated as new stock..
At the year ended 30 June 2000, the following trial balance was extracted:
|
Sh.
|
Sh.
|
|
Capital
Purchases
Sales
Debtors
Creditors
Expenses
Drawings
Bank balances
|
1,620,000
470,250
135,000
480,000
70,950
2,776,200
|
600,000
2,133,000
43,200
_______
2,776,200
|
Required:
(a) Trading, profit and loss account for the year ended 30 June 2000.
(b) (i) Hire purchase debtors account
(ii) Repossessions account.
(c) Balance sheet as at 30 June 2000.