The year-end Trial Balance of Global Ltd is set out. Further information:

(a) Cost of closing inventory was £644,000.

(b) The Trial Balance failed to balance because a folio in the Purchases Day Book had been added as £226,000 instead of £248,000. The difference has been placed in a Suspense account.

(c) Furniture and vehicles are to be depreciated for the year at 5% and 20% per annum, using the straight-line method for furniture and reducing balance method for vehicles.

(d) Directors wish to write off a trade debt of £8,000 and to adjust the allowance to cover 5% of the remaining receivables.

(e) Rent is payable at £10,000 per month.

(f) £44,000 salaries and £3,000 advertising remain unpaid as at the year-end.

(g) Tax on current year’s profit is estimated at £138,000.

(h) A dividend of 3p per share, declared by the directors, is yet to be accounted for.

Required: 

Prepare, for internal use, the Statement of income for the year ended 31 December 2011 and the Statement of financial position as at that date.

Transcribed Image Text:

Trial Balance as at 31 December 2011 Furniture (cost and depreciation) Motor vehicles (cost and depreciation) Inventory - 31.12.2010 Ordinary shares of £1 each Share premium a/c Purchases a/c Return outwards Rent a/c Bank overdraft Salaries and wages Advertising 9% Debentures (issued 2009) Stationery Receivables/payables Cash and bank balance Interim dividend paid Bad debts Allowance for doubtful debts Interest paid on debentures Sales Suspense a/c Accumulated profit b/f Sales commission £'000 £'000 640 130 280 90 542 - M 3,248 - 140 314 56 - 21 648 30 20 11 9 - 22 - 400 80 - 35 - 34 I I 200 I 494 I 39 4,241 282 44 6,025 6,025