The following information has been extracted from the books of account of Billinge plc as at 30
Question:
The following information has been extracted from the books of account of Billinge plc as at 30 June 2012:
\begin{tabular}{|c|c|c|}
\hline & Dr & $\mathrm{Cr}$ \\
\hline & $£ 000$ & $£ 000$ \\
\hline Administration expenses & 242 & \\
\hline Cash at bank and in hand & 157 & \\
\hline Cash received on sale of fittings & & 3 \\
\hline Corporation tax (over-provision for the previous year) & & 10 \\
\hline Deferred taxation & & 60 \\
\hline Depreciation on fixtures, fittings, tools and equipment (1 July 2011) & & 132 \\
\hline Distribution costs & 55 & \\
\hline Factory closure costs & 30 & \\
\hline Fixtures, fittings, tools and equipment at cost & 340 & \\
\hline Retained profits (at 1 July 2011) & & 40 \\
\hline Purchase of equipment & 60 & \\
\hline Purchases of goods for resale & 855 & \\
\hline Sales (net of VAT) & & 1,500 \\
\hline \begin{tabular}{l}
Share capital ( 500,000 authorised, issued and \\
fully paid ordinary shares of $£ 1$ each)
\end{tabular} & & 500 \\
\hline Inventory (at 1 July 2011) & 70 & \\
\hline Trade accounts payable & & 64 \\
\hline Trade accounts receivable & $\frac{500}{£ 2,309}$ & $\overline{£ 2,309}$ \\
\hline
\end{tabular}
\section*{Additional information:}
1 The company was incorporated in 2006.
2 The inventory at 30 June 2012 (valued at the lower of cost or net realisable value) was estimated to be worth $£ 100,000$.
3 Fixtures, fittings, tools and equipment all related to administrative expenses. Depreciation is charged on them at a rate of $20 \%$ per annum on cost. A full year's depreciation is charged in the year of acquisition, but no depreciation is charged in the year of disposal.
4 During the year to 30 June 2012, the company purchased $£ 60,000$ of equipment. It also sold some fittings (which had originally cost $£ 20,000$ ) for $£ 3,000$ and for which depreciation of $£ 15,000$ had been set aside.
5 The corporation tax based on the profits for the year at a rate of $35 \%$ is estimated to be $£ 100,000$. A transfer of $£ 40,000$ is to be made to the deferred taxation account.
6 The company proposes to pay a dividend of 20p per ordinary share.
7 The standard rate of income tax is $30 \%$.
\section*{Required:}
In so far as the information permits, prepare Billinge plc's income statement for the year ending 30 June 2012, and a statement of financial position as at that date in accordance with the Companies Acts and appropriate accounting standards.
\section*{(Association of Accounting Technicians)}
Step by Step Answer:
Frank Woods Business Accounting Volume 2
ISBN: 9780273767923
12th Edition
Authors: Frank Wood, Ph.D. Sangster, Alan