Shower Ltd was incorporated towards the end of 20X2, but it did not star t trading until 20X3. Its historical cost statement of financial position at 1 January 20X3 was as follows:

Share capital, £1 shares ..... 2,000

Loan (interest free) .......      8,000

                                            £10,000

Non-current assets, at cost ..... 6,000

Inventor y, at cost (4,000 units) ... 4,000

£10,000

A summary of Shower Limited’s bank account for 20X3 is given below:

All the company’s transactions are on a cash basis.

The non-current assets are expected to last for five years and the company intends to depreciate its non-current assets on a straight-line basis. The non-current assets had a resale value of £2,000 at 31 December 20X3.

Notes

1 The closing inventor y is 2,000 units and the inventor y is sold on a first-in-first-out basis.

2 All prices remained constant from the date of incorporation to 1 January 20X3, but thereafter, various relevant price indices moved as follows:

Required:

Produce statements of financial position as at December 20X3 and statements of comprehensive incomes for the year ended on that date on the basis of:

(i) Historical cost;

(ii) Current purchasing power (general price level);

(iii) Replacement cost;

(iv) Continuous contemporary accounting(NRVA).

Transcribed Image Text:

I Jan 20X3 Opening balance nil Sales (8,000 units) 30 Jun 20X3 20,000 Less Purchase (6,000 units) Sundry expenses 9,000 29 Jun 20X3 5,000 14,000 31 Dec 20X3 Closing balance £6,000