5. Cyclocrosse sent the revenue a payment of 36,000 on 31 December 2020 as final payment for the 2019 corporation tax charge. The corporation tax charge for 2020 is expected to be 35,000. Neither the payment nor the tax charge has been recorded in the trial balance. Requirement: Prepare, for Cyclocrosse Ple, in a form compliant with IFRS: (8 Marks) (a) A Statement of Profit or Loss and Other Comprehensive Income for the year ending 31 December 2020. (b) A Statement of Financial Position as at 31 December 2020. (13 Marks) (c) Briefly explain the purpose of producing financial statements. (3 Marks) 31,500 AUTUMN 2021 AC313 - ADVANCED FINANCIAL REPORTING Question 1 The following trial balance has been extracted from the records of Cyclocrosse Plc.as at 31 December 2020. Debit Credit Revenue & Purchases 405,950 751,350 Returns inwards 23,250 Returns outwards 15,390 Inventories at 1 January 2020 92,500 Buildings at cost 383,000 Plant & Equipment at cost 162,000 Prepayments 2,820 Provision for doubtful debts 8,440 Accumulated depreciation: Buildings 78,950 Trade receivables 125,500 Accumulated depreciation: Plant & Equipment Finance Costs 12,160 Administration expenses 82,230 Distribution costs 25,735 Bank 5,655 Trade Payables 76,650 Taxation 33,500 Accruals 4,250 Long term loan 35,000 10% Debentures 50,000 Ordinary Share Capital 120.000 Retained earnings 104.460 1,315,145 1,315,145 Additional Information 1. Closing inventory was counted on 31 December 2020 and valued at 85,000. 2. Cyclocrosse want to write off a bad debt of 3,550. The company also want to maintain a provision of 10% of trade receivables. 3. On 1 March 2020, the company purchased a new machine. All costs were paid in cash. The only entry made was to credit Bank and debit the Purchases account. These costs are detailed below. Purchase price 96,000 Installation & assembly costs 26,000 Delivery charges 1,500 Maintenance costs 2,800 The maintenance costs are in respect of the first service of the machine to 30 June 2021. (d) Prepare a short note describing THREE users of these financial statements (9 Marks) and detail their information needs. (9 Total 33 marks. Question 2 Brakes Limited ("Brakes') is currently preparing its Statement of Cash Flows. The company has asked for your assistance. Set out below is the Statement of Financial of Position as at 31 December 2020, a Statement of Profit or Loss for the year ending 31 December 2020 together with the comparatives for 31 December 2019. Statement of Financial Position of Brakes Ltd. as at 31 December 2020. 2020 2019 Non-Current Assets Property Plant & Equipment 332,115 354,100 Current Assets Inventories Trade Receivables Prepayments Interest receivable Short term deposits Bank Total Assets 67,058 54,500 7,750 2.550 3,600 8.250 475,823 57,510 37,250 8,750 1,725 4,500 9.250 473.085 Equity & Liabilities Ordinary Share Capital Retained Earnings 214.500 134,938 349,438 197,500 123,895 321,395 85,000 120,000 4. Depreciation is charged in full in the year of acquisition and none in the year of disposal as follows: Buildings:5% per annum on a straight line - 100% is charged to cost of sales. Plant & equipment:15% per annum on a reducing balance basis -70% is charged to cost of sales and 30% to distribution costs. Depreciation for the year has not been recorded in the trial balance. Non-current Liabilities 8% Debentures Current Liabilities Trade Payables Taxation Bank Overdraft Total Equity & Liabilities 28,170 1,465 11.750 475,823 27,560 1,680 2.450 473.085 Page 2 of 6 Page 3 of 6 5. Cyclocrosse sent the revenue a payment of 36,000 on 31 December 2020 as final payment for the 2019 corporation tax charge. The corporation tax charge for 2020 is expected to be 35,000. Neither the payment nor the tax charge has been recorded in the trial balance. Requirement: Prepare, for Cyclocrosse Ple, in a form compliant with IFRS: (8 Marks) (a) A Statement of Profit or Loss and Other Comprehensive Income for the year ending 31 December 2020. (b) A Statement of Financial Position as at 31 December 2020. (13 Marks) (c) Briefly explain the purpose of producing financial statements. (3 Marks) 31,500 AUTUMN 2021 AC313 - ADVANCED FINANCIAL REPORTING Question 1 The following trial balance has been extracted from the records of Cyclocrosse Plc.as at 31 December 2020. Debit Credit Revenue & Purchases 405,950 751,350 Returns inwards 23,250 Returns outwards 15,390 Inventories at 1 January 2020 92,500 Buildings at cost 383,000 Plant & Equipment at cost 162,000 Prepayments 2,820 Provision for doubtful debts 8,440 Accumulated depreciation: Buildings 78,950 Trade receivables 125,500 Accumulated depreciation: Plant & Equipment Finance Costs 12,160 Administration expenses 82,230 Distribution costs 25,735 Bank 5,655 Trade Payables 76,650 Taxation 33,500 Accruals 4,250 Long term loan 35,000 10% Debentures 50,000 Ordinary Share Capital 120.000 Retained earnings 104.460 1,315,145 1,315,145 Additional Information 1. Closing inventory was counted on 31 December 2020 and valued at 85,000. 2. Cyclocrosse want to write off a bad debt of 3,550. The company also want to maintain a provision of 10% of trade receivables. 3. On 1 March 2020, the company purchased a new machine. All costs were paid in cash. The only entry made was to credit Bank and debit the Purchases account. These costs are detailed below. Purchase price 96,000 Installation & assembly costs 26,000 Delivery charges 1,500 Maintenance costs 2,800 The maintenance costs are in respect of the first service of the machine to 30 June 2021. (d) Prepare a short note describing THREE users of these financial statements (9 Marks) and detail their information needs. (9 Total 33 marks. Question 2 Brakes Limited ("Brakes') is currently preparing its Statement of Cash Flows. The company has asked for your assistance. Set out below is the Statement of Financial of Position as at 31 December 2020, a Statement of Profit or Loss for the year ending 31 December 2020 together with the comparatives for 31 December 2019. Statement of Financial Position of Brakes Ltd. as at 31 December 2020. 2020 2019 Non-Current Assets Property Plant & Equipment 332,115 354,100 Current Assets Inventories Trade Receivables Prepayments Interest receivable Short term deposits Bank Total Assets 67,058 54,500 7,750 2.550 3,600 8.250 475,823 57,510 37,250 8,750 1,725 4,500 9.250 473.085 Equity & Liabilities Ordinary Share Capital Retained Earnings 214.500 134,938 349,438 197,500 123,895 321,395 85,000 120,000 4. Depreciation is charged in full in the year of acquisition and none in the year of disposal as follows: Buildings:5% per annum on a straight line - 100% is charged to cost of sales. Plant & equipment:15% per annum on a reducing balance basis -70% is charged to cost of sales and 30% to distribution costs. Depreciation for the year has not been recorded in the trial balance. Non-current Liabilities 8% Debentures Current Liabilities Trade Payables Taxation Bank Overdraft Total Equity & Liabilities 28,170 1,465 11.750 475,823 27,560 1,680 2.450 473.085 Page 2 of 6 Page 3 of 6