This business/management problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.
ScanSolve AI Answer
Here is the solution to your question: i) Prepare trading, profit and loss account for the year ending 31st Dec 2022. Kieni Traders \\ Trading, Profit and Loss Account \\ For the year ended 31st December 2022 | Details | Shs. | Shs. | | :-------------------------------- | -----: | -----: | | Sales | | 474,000 | | Less: Sales Returns | | (4,600) | | Net Sales | | 469,400 | | | | | | Less: Cost of Goods Sold | | | | Opening Stock | 460,000 | | | Purchases | 280,000 | | | Less: Purchase Returns | (7,000) | | | Net Purchases | 273,000 | | | Add: Carriage Inwards | 28,000 | | | Cost of Goods Purchased | 301,000 | | | Cost of Goods Available for Sale | 761,000 | | | Less: Closing Stock | (54,000) | | | Cost of Goods Sold | | (707,000) | | | | | | Gross Loss | | (237,600) | | | | | | Add: Other Income | | | | Rent Income | | 23,000 | | Discount Received | | 2,000 | | Total Other Income | | 25,000 | | | | | | Less: Operating Expenses | | | | General Expenses | 89,000 | | | Discount Allowed | 3,000 | | | Total Operating Expenses | | (92,000) | | | | | | Net Loss | | (304,600) | ii) Calculate working capital. Step 1: Calculate total current assets. Current assets from the trial balance are Shs. 78,000. Closing stock is an additional current asset. Total Current Assets = Current Assets (from TB) + Closing Stock \\ Total Current Assets = 78,000 + 54,000 \\ Total Current Assets = 132,000 Shs. Step 2: Identify current liabilities. Current liabilities from the trial balance are Shs. 53,000. Current Liabilities = 53,000 Shs. Step 3: Calculate working capital. Working Capital = Total Current Assets - Current Liabilities \\ Working Capital = 132,000 - 53,000 \\ Working Capital = 79,000 Shs. Send me the next one 📸