Faridah Yusof supplies medals, trophies and team kit to schools holding sports days across Selangor, Malaysia. Trade is busiest in the two terms before the ...

Two features make this question different from a plain final accounts task. Revenue has to be read off the bar chart rather than taken from a list, and goods have been taken out of the business for the owner's own family, which is drawings in kind and has to be removed from purchases as well as from capital.

Step 1: revenue from the chart. The four bars are labelled in thousands of dollars, so read each and add.

The vertical axis is in $000, so 242.0 thousand means revenue of $242 000. Returns inwards of $2 900 are goods customers sent back, so they are deducted from revenue to give net revenue of $239 100; they are not an expense.

Step 2: goods taken for own use. Kit costing $900 left the business for Faridah's children. Nothing was sold, so it must not stay in cost of sales. The double entry is to reduce purchases by $900 and to increase drawings by $900. Both halves matter: reducing purchases alone would raise gross profit without ever reducing capital, and the statement would not balance.

Step 3: the remaining adjustments.

The allowance falls this year, from $1 150 to $756. A reduction in the allowance is not an expense; it is the reversal of a charge made in an earlier year, so the $394 is added to income. Getting the direction wrong costs two marks, because the profit moves by twice the figure.

(a) Income statement for the year ended 30 April 2025 [17]

Carriage inwards and carriage outwards are deliberately both present and must be separated. Carriage inwards is part of the cost of bringing goods in, so it sits in cost of sales and reduces gross profit; carriage outwards is the cost of delivering to the customer, so it appears below gross profit as an expense.

(b) Statement of financial position at 30 April 2025 [8]

Both sides come to $67 094, which is the check that the goods taken for own use were treated on both sides. Notice also that racking is now half written off ($14 000 of $28 000 at 10% straight line means five years have passed) while the vehicles keep losing 30% of a shrinking carrying amount, so their charge falls year on year. Reducing balance suits assets that lose most value early, such as vehicles; straight line suits assets used evenly, such as fixed racking.