On 1 July 2011 Mark Farmer opened a shop called Miphone Ltd. The trial balance for the
Question:
On 1 July 2011 Mark Farmer opened a shop called Miphone Ltd. The trial balance for the first year is shown below.
Additional information at 30 June 2012:
■ Inventory is valued at £890.
■ Advertising paid in advance is £260.
■ Accrued expenses are lighting and heating £540, telephone and Internet £290 and general expenses £160.
■ Estimated current tax payable is £1,200.
Required
(a) Using a spreadsheet, prepare a draft statement of comprehensive income for Miphone Ltd for the year ended 30 June 2012, classifying expenses by nature. In addition, prepare a draft statement of financial position at that date.
(b) After taking advice from his accountant, Mark has decided to depreciate equipment using the straight-line method over 5 years, with no residual value He has also decided to make an allowance for doubtful receivables and has decided to base it on 10% of opening trade receivables. Make these adjustments to your spreadsheet and prepare a statement of comprehensive income for Miphone Ltd for the year ending 30 June 2013, classifying expenses by nature. In addition, prepare a statement of financial position at that date.
Step by Step Answer:
Business Accounting An Introduction To Financial And Management Accounting
ISBN: 9780230276239
2nd Edition
Authors: Jill Collis, Roger Hussey, Andrew Holt, Holt Collis, J. Collis