AF3110 Intermediate Accounting 1 1Week 2 - Questions Question 2 (Moderate) Super Ltd is a manufacturer and supplier of specialist seat padding for passenger aircraft. The following trial balance has been extracted from the nancial records of Super Ltd at 31 March 2013. Dr Cr $'ooo $'ooo Bank 14 Trade payables 62 Other payabies 7? Trade receivables 300 Chairman's salary 50 Electricity (factory) 33 Insurance 1'] Land at cost 200 Machinery 420 Accumulated depreciation (machinery) 152 Office expenses 25 Share capital, 600,000 shares 300 Retained earnings at 1 April 2012 132 Allowance for bad debts 8 Purchase: 1,314 Rent of distribution depot 28 Factory rates 40 Sales 2,350 Inventory at 1 April 2012 156 Vehicles at cost 96 Accumulated depreciation {vehicles} 56 Wages and salaries 448 Royalties received 4 3.141 31141 Additional information: (i) Inventory at 31 March 2013 valued at cost amounted to $164,000. (ii) Depreciation is to be provided on machinery and vehicles at rates of 25% and 20% respectively. Super Ltd has adopted the reducing balance method of providing for depreciation. Machinery is used for entirely for production and vehicles are used 55% in distribution and 25% in administration. (iii) The audit fee for the year to 31 March 2013 is estimated to be $12,000 and should be accrued in the 2013 nancial statements. (iv) Insurance paid in advance at 31 March 2013 amounted to $3,000. Insurance should be allocated as follows:- Production 50% Administration 50% (v) The allowance for bad debts is to be set to 5% of the outstanding trade receivables at 31 March 2013. Bad debts expenses are classified under distribution costs. (vi) Prots tax of $80,000 has been estimated in respect of the prot for the year. (vii) An ordinary dividend of 10 cents per share was declared on 1 March 2013 and paid on 15 April 2013