Presented below is a draft set of financial statements for Chips Limited. The following additional information is
Question:
Presented below is a draft set of financial statements for Chips Limited.
The following additional information is available:
1 Purchase invoices for goods received on 29 June 2009 amounting to £23,000 have not been included. This means that the cost of sales figure in the income statement has been understated.
2 A motor vehicle costing £8,000 with depreciation amounting to £5,000 was sold on 30 June 2009 for £2,000, paid by cheque. This transaction has not been included in the company’s records.
3 No depreciation on motor vehicles has been charged. The annual rate is 20 per cent of cost at the year end.
4 A sale on credit for £16,000 made on 1 July 2009 has been included in the financial statements in error. The cost of sales figure is correct in respect of this item.
5 A half-yearly payment of interest on the secured loan due on 30 June 2009 has not been paid.
6 The tax charge should be 30 per cent of the reported profit before taxation. Assume that it is payable, in full, shortly after the year end.
Required:
Prepare a revised set of financial statements incorporating the additional information in 1 to 6 above. (Work to the nearest £1,000.)
Step by Step Answer:
Accounting An Introduction
ISBN: 9780273733201
5th Edition
Authors: Eddie McLaney, Dr Peter Atrill, Eddie J. Mclan