Springtime Ltd is a UK trading company buying and selling as wholesalers fashionable summer clothes.

The following balances have been extracted from the books as at 31 March 20X4:

Notes:
1 Depreciation is provided at the following annual rates on a straight-line basis: deliver y vans 20%;
office cars 25%; stores 1%.
2 The following taxation rates may be assumed: corporate income tax 35%; personal income tax 25%.
3 The dividend income arises from investments held in non-current investments.
4 It has been decided to transfer an amount of £150,000 to the deferred taxation account.
5 The overseas operations consisted of expor ts. In 20X3/X4 these amounted to £5,000,000 (sales)
with purchases of £4,000,000. Related costs included £100,000 in storeroom staff and £15,000 for office staff.
6 Directors’ emoluments include:
Chairperson 100,000 Managing director 125,000 Finance director 75,000 Sales director 75,000 Expor t director 25,000 (resigned 31 December 20X3)
£400,000 Required:

(a) Produce an income statement suitable for publication and complying as far as possible with generally accepted accounting practice.

(b) Comment on how IFRS 5 has improved the quality of information available to users of accounts.

(c) Give two reasons why information contained in the accounting policies notes is of importance to users of accounts.

Transcribed Image Text:

Auditor's remuneration Income tax based on the accounting profit: 000 30 For the year to 31 March 20X4 3,200 Overprovision for the year to 31 March 20X3 200 Delivery expenses (including 300,000 overseas) 1,200 Dividends: final (proposed - to be paid I August 20X4) interim (paid on 1 October 20X3) 200 100 Non-current assets at cost: Delivery vans 200 Office cars 40 Stores equipment Dividend income (amount received from listed companies) 5,000 1,200 Office expenses Overseas operations: closure costs of entire operations Purchases Sales (net of sales tax) 800 350 24,000 35,000 Inventory at cost: At 1 April 20X3 At 31 March 20X4 Storeroom costs Wages and salaries: Delivery staff Directors' emoluments Office staff Storeroom staff 5,000 6,000 1,000 700 400 100 400