The following trial balance was extracted from the ledgers of AV Trading Company Limited on 31...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The following trial balance was extracted from the ledgers of AV Trading Company Limited on 31 December 2007. 10% debenture 2015 (issued in 2005) Bank Bank fixed deposits Bank interest income Bank overdraft interests Cash General reserve Inventory, at 1 January 2007 Management fees (paid) Ordinary share capital ($5 per share) Plant and machinery - cost Plant and machinery - accumulated depreciation, at 1 January 2007 Property - cost Property - accumulated depreciation, at 1 January 2007 Purchases Purchases returns Retained profit, at 1 January 2007 Salaries (paid) Sales Sales returns Share premium Trade payables Trade receivables Allowance for doubtful debt Debit $ 150,000 1,000 5,000 180,000 25,000 100,000 800,000 1,690,000 280,000 120,000 260,000 3,611,000 Credit S 200,000 120,000 2,000 40,000 50,000 36,000 80,000 55,000 115,000 2,553,000 150,000 190,000 20,000 3.611,000 Additional information: Carrying amount of the closing inventory at 31 December 2007 was $480,000. The allowance for doubtful debt was increased to $30,000 at 31 December 2007. Depreciation for the year is to be provided as follows: Plant and equipment Property (1) (2) (3) (5) 20% per annum on reducing balance 5% per annum on cost At 31 December 2007, management fees paid in advance amounted to $5,000 and salaries due amounted to $25,000. The income tax for the year is estimated to be $150,000. (6) (7) REQUIRED: (a) (b) The directors proposed to pay a final dividend of $5 per share and to transfer $40,000 from retained profit to general reserve. There was no share issued during the year ended 31 December 2007. (c) Prepare the statement of comprehensive income of the company for the year ended 31 December 2007. (7 marks) Prepare the statement of financial position of the company as at 31 December 2007. Show your workings. (14 marks) Briefly explain the following accounting concepts: accrual basis of accounting; and consistency of presentation. (i) (ii) (4 marke) The following trial balance was extracted from the ledgers of AV Trading Company Limited on 31 December 2007. 10% debenture 2015 (issued in 2005) Bank Bank fixed deposits Bank interest income Bank overdraft interests Cash General reserve Inventory, at 1 January 2007 Management fees (paid) Ordinary share capital ($5 per share) Plant and machinery - cost Plant and machinery - accumulated depreciation, at 1 January 2007 Property - cost Property - accumulated depreciation, at 1 January 2007 Purchases Purchases returns Retained profit, at 1 January 2007 Salaries (paid) Sales Sales returns Share premium Trade payables Trade receivables Allowance for doubtful debt Debit $ 150,000 1,000 5,000 180,000 25,000 100,000 800,000 1,690,000 280,000 120,000 260,000 3,611,000 Credit S 200,000 120,000 2,000 40,000 50,000 36,000 80,000 55,000 115,000 2,553,000 150,000 190,000 20,000 3.611,000 Additional information: Carrying amount of the closing inventory at 31 December 2007 was $480,000. The allowance for doubtful debt was increased to $30,000 at 31 December 2007. Depreciation for the year is to be provided as follows: Plant and equipment Property (1) (2) (3) (5) 20% per annum on reducing balance 5% per annum on cost At 31 December 2007, management fees paid in advance amounted to $5,000 and salaries due amounted to $25,000. The income tax for the year is estimated to be $150,000. (6) (7) REQUIRED: (a) (b) The directors proposed to pay a final dividend of $5 per share and to transfer $40,000 from retained profit to general reserve. There was no share issued during the year ended 31 December 2007. (c) Prepare the statement of comprehensive income of the company for the year ended 31 December 2007. (7 marks) Prepare the statement of financial position of the company as at 31 December 2007. Show your workings. (14 marks) Briefly explain the following accounting concepts: accrual basis of accounting; and consistency of presentation. (i) (ii) (4 marke)
Expert Answer:
Answer rating: 100% (QA)
a AV Trading Company Limited Statement of comprehensive income for the year ended 31 December 2007 R... View the full answer
Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Posted Date:
Students also viewed these economics questions
-
For each of the three income levels shown, pro vide appropriate data to satisfy or be consistent with the absolute and relative income hypotheses. CONSUMPTION MPC ABSOLUTE RELATIVE ABSOLUTE RELATME...
-
For each of the three income levels shown, pro vide appropriate data to satisfy or be consistent with the absolute and relative income hypotheses. SAVING MPS ABSOLUTE RELATIVE ABSOLUTE RELATME INCOME...
-
For each of the three control charts, identify whether or not there is evidence that the process depicted is out of control.
-
Molly earns a gross yearly salary of $132,676. She has no dependent children and made the following tax deductible purchases: Charitable contributions: $5,401 Student loan interest: $1,429 When she...
-
On January 1, 2016, Somerville Corporation sold a used truck to Cornelius Company and LO 13.8 accepted a $28,000 non-interest-beating note due January 1, 2019. Somerville carried the truck on its...
-
The following experimental data are available for \(\mathrm{CO}_{2}\) gas at \(92^{\circ} \mathrm{C}\) : PR 1 2 3 4 6 8 10 0.856 0.583 0.535 0.620 0.800 0.975 1.160 Find the fugacity of CO2 at 100...
-
The objective . . . is not to develop one single approach to measuring and reporting eco-efficiency. Rather it is to establish a general, voluntary framework that is flexible enough to be widely...
-
The following information relates to Armanda Co. for the year 2017. Instructions After analyzing the data, prepare an income statement and an owners equity statement for the year ending December...
-
Wahl manufacturing is considering an investment in a numerically controlled machine to save on manufacturing costs. The cost of the machine can be fully depreciated without consideration of any...
-
Suppose the S&P 500 Index portfolio pays a dividend yield of 2% annually. The index currently is 3,000. The T-bill rate is 3%, and the S&P futures price for delivery in one year is $3,045. Construct...
-
The value of the impedance between the buses are given in perunit. Assume that there is no mutual coupling between any two branches. Determine Ybus using the building block procedure. j0.3 j0.5 V0.2...
-
1. How many degrees Celsius does the temperature decrease when there is a 45.8F decrease in temperature? 2. For each 1.00F change in temperature what is the corresponding change in degrees Celsius?...
-
1- How much work is done by friction if a 12.5 kg object moving at 9.0 m/s slides to a stop along a rough surface? 2- Billiard Ball A, moving at speed 53.3 m/s, collides and sticks with Billiard Ball...
-
A ball swings counterclockwise in a vertical circle at the end of a rope 1.20 m long. When the rope makes angle 30.58 with the vertical and the ball is past the lowest point on its way up, its total...
-
1. A modern-day zeppelin holds 9,840 m 3 of helium. Compute its maximum payload at sea level. (Assume the helium and air to be at 0C and 1 atm.) Please give your answer in N 2. An empty storage tank...
-
Use the given information to find sin28, cos28, and tan28. 4. cose, and 0 < <90
-
Let f be the function defined by the equation below. f(x)=2+25-2 Find the following. f(-4) = 8 f(1) = 6 f(11/4) = 5 f(x+2)=2+27-x X
-
In the synthesis of the keto acid just given, the dicarboxylic acid decarboxylates in a specific way; it gives Explain. HO rather than HO
-
Two electric motors are being economically evaluated for use in a submersible robotic device. Each is capable of delivering 90 horsepower to a necessary application that the device performs. Data for...
-
A new machine is purchased to be part of a manufacturing process in order to increase efficiency and the rate of production. The machine costs $500,000 and the estimated savings from using the...
-
For the following table, assume a MARR of 10% per year and a useful life for each alternative of six years that equals the study period. The rank-order of alternatives from least capital investment...
-
Briefly explain the connections between values such as effort optimism, utilitarian individualism, and the American economic system. Throughout this chapter, we have identified culture as something...
-
Do you speak a language other than English as a first language? If so, do you want your children and grandchildren to speak that language? In the United States, the tools of government and education...
-
If English is your first language, did your parents or grandparents speak a different first language? How do you feel about your ability (or lack of ability) in that language? In the United States,...
Study smarter with the SolutionInn App