Co ltd

Phillipa Page prints and publishes study materials. She has prepared the following trial balance as at 30 June 20X7: Dr Cr $ $ Purchases 60 000 Inventory at 1 July 20X6 10 000 Sales 120 000 Distribution costs 13 200 Administrative and selling expenses 5 600 Trade receivables 12 200 Discount allowed 1 550 Bank balance 4 150 Capital account at 1 July 20X6 73 100 Discount received 2 500 6% Bank loan 10 000 Non-current assets at carrying amount 102 500 Capital introduced in the year 5 000 Loan interest paid 300 Drawings 8 000 Trade payables 5 600 Wages 15 000 Suspense 8 000 228 350 228 350 The following is to be taken into account. 1. Inventory valuation at 30 June 20X7 was $12 000 2. Phillipa decided to write off an irrecoverable receivable of $1 000. This should be accounted for as an administrative and selling expense. 3. The wages cost should be split equally between cost of sales and administrative and selling expenses. 4. Discounts allowed should be accounted for as an administrative and selling expense. 5. The bank loan was taken out on 1 July 20X6 6. The depreciation charge for the year of $5 000 on property, plant and equipment has not yet been accounted for. It should be classified as a cost of sale. 7. The balance on the suspense account represents the proceeds from the disposal of an item of property, plant and equipment. At the date of disposal, that item had a net carrying amount of $10 000. The gain or loss on disposal should be accounted for as a cost of sale.