A-2

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The question has more than 4 parts. Therfore, please answer them all and you can deduct this from the questions limit I have ( I have discussed this with online costumer service representative and she suggested the question to be weighted in 2 instead of one if its more than 4 parts.

Each question needs to be solved completely and provides how to do steps for the answer with it

SECTION A ANSWER BOTH QUESTIONS QUESTION A1 Green plc has produced the following trial balance as at 31 January 2020: 760,000 37,500 250,000 110,000 170,000 62,000 750,000 48,000 325,000 80,000 125,000 Revenue Inventories at 1 Feb 2019 Purchases Distribution costs Administrative expenses Dividends paid Buildings cost Accumulated depreciation Plant and machinery Cost Accumulated depreciation Motor vehicles Cost Accumulated depreciation Trade receivables Trade payables Prepayments Accruals Bank balance Bank overdraft Bank loan Share capital - ordinary shares of 1 each Retained earnings Share premium account 45,000 345,000 190,000 175,000 85,000 110,000 55,000 121,500 390,000 660,000 25,000 2,459,500 2,459,500 ed Kingdom) Focus EN The following Information has not yet been taken account of: (1) The closing Inventory is determined to be 150,000. (1) Buildings - Straight line method over 50 years - Allocated to cost of sales. Plant and machinery - 10% straight line method - Split 50/50 between cost of sales and administrative expenses. Motor vehicles -20% reducing balance method - allocated entirely to distribution costs. The trade receivables balance includes 6,000 due from Alex Skinner who has now been declared bankrupt. In the circumstances, it has been decided to write the debt off as in irrecoverable / bad debt which will be allocated to administrative expenses. (iv) Green Plc has now decided to create an allowance for doubtful debts and allocate it to administrative expenses. So, the allowance for doubtful debts at 31 January 2020 is to be 8% of trade receivables at that date (after writing off irrecoverable debts). (0) Distribution costs prepaid at 31 January amounted to 400. (vi) Administrative costs accrued and due at 31 January 2020 amounted to 2,500. (vii) The bank loan was taken out on 1 February 2018 and is repayable in 8 years. No adjustments have been made for the interest charge of 6% per annum. (VII) Corporation tax of 55,500 has been estimated in respect of the profit for the year. Required: a) Prepare a statement of financial position for Green plc as at 31 January 2020. Paon of 15 1999 words 100% Focus SAMPLE PAPER QUESTION Section A: Al. Mitchell ple is a manufacturing company. The following balanges have been extracted from its books and records as at 30 June 2020: 225,000 22.500 56,301 61,875 21,465 372,360 33,750 Share capital Share premium Retained earnings Delivery vans at cost Delivery vans accumulated depreciation Property at cost Property accumulated depreciation Purchases Administration expenses Factory wages Warehouse wages Office wages Bad debts written off Sales Inventory at 1 July 2019 Cash at bank Trade receivables Provision for doubtful debts at 1 July 2019 Trade payables 10% debentures Debenture interest paid Dividend paid 536,010 118,878 83.007 60.970 27.820 1.792 956,776 61.776 69.417 76,437 3.375 45,900 112.500 5.625 1.600 1.477.567 1.477.567 The following information has not yet been taken account of: a) The company has the following depreciation policy: Property 10% straight line Delivery vans 20% reducing balance Depreciation on the property should be allocated as follows: Cost of sales 50% Administration 50% Depreciation on delivery vans Distribution cost 100% You should round numbers to the nearest pound. b) The doubtful debt provision is required to be 10% of the trade receivables. 1 c) The closing inventory is determined to be 380,000. d) Distribution costs include 7,500 a prepayment and a total of 13,300 accrued expenses, e) Accrued administration expenses total 4,520, 1) Corporation tax for the year is estimated to be 39,700. Required: a) Prepare a statement of financial position for Mitchell plc as at 30 June 2020, SAMPLE PAPER ANSWER Section A: + A1: Mitchell plc a) Prepare a statement of profit or loss for Mitchell plc for the year ended 30 June 2020 Statement of profit or loss for the year ended 30 June 2020 956,776 (319.411) 637,365 Revenue Cost of sales (W1) Gross profit Other operating income Distribution costs (W1) Administrative expenses (W1) I Profit from operations 10 % debentures (112,500 10%) Profit before tax Income tax expense Profit for the year (64.852) (175,897) 396,616 (11.250) 385,366 (39.700) 345,666 U b) Prepare a statement of financial position for Mitchel plc as at 30 June 2020. Statement of financial position as at 30 June 2020 Non-current assets Vans (W2) 32,328 Plant and machinery (2) 301,374 333,702 Current assets Inventories Trade receivables (4) Prepayments Cash at bank 380,000 68,793 7,500 69,417 525,710 Total assets 859,412 Current liabilities Trade payables Accruals 5,625 +3,300+4,520 Tax payable 45.900 13.445 39.700 39.045 Non-current liabilities 10 % debentures 112.500 Total abilities Net assots 211.545 647,867 Equity Ordinary share capital Share premium account Retained carings W3 225.000 22.500 400,367 Total equity 647,867 Page 2 of 11 938 words Focus Workings: Working 1: Allocation of costs Cost of Sales Admin Expenses Distribution Costs 61,776 536,010 Opening inventories Purchases Depreciation Property Vans dep Irrecoverable debts Allowance for bad debts w4 18,618 18,618 8,082 1,792 4,269 83,007 Factory wages Warehouse wages 60,970 Office wages 27,820 Administrative 118,878 Administrative accrual 4,520 distribution prepayment 7,500 distribution accrual 3,300 Less: Closing inventories -380,000 319,411 175,897 64,852 Page 3 of 11 938 words LE Focus 100% Working 2 PPE Property Delivery vans E 61,875 Total E 372,360 Cost less: Accumulated depreciation Jess Depreciation charge for year Carrying Value 21,465 33,750 8,082 32,328 37,236 301,374 333,702 Working 3 Retained earnings: Per TB Profit of the year Dividends paid 56,301 345,666 1.600 400,367 Working 4 Receivables per trial balance 76,437 Provision required (76,437 x 10%) 7.643.70 Net debtors 68,793 Opening provision 3,375 Provision required 2644 Increase to income statement 4,269