Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Blue Stream plc is a small company with interests in retailing and property. The financial director of Blue Stream plc is currently finalising the financial

image text in transcribedimage text in transcribed

Blue Stream plc is a small company with interests in retailing and property. The financial director of Blue Stream plc is currently finalising the financial statements for the year ended 28 February 20X5. The trial balance at that date is shown below: BLUE STREAM plc TRIAL BALANCE AT 28 FEBRUARY 20X5 Debit 000 Credit 000 2.500 1,424 1,950 1,740 480 2,000 2,000 Ordinary share capital (1 par value) Retained earnings at 28 February 20X4 Investment property: Fair value (at 28 February 20X4) Equipment: Cost Equipment: Accumulated depreciation (at 28 February 20X4) Right of use asset Lease liability Accounts receivable Inventory at cost HMRC / Tax authority Cash at bank Accounts payable Sales Cost of sales Rental income Salaries and wages Other costs 1,115 1,245 200 974 870 9,850 5,100 100 1,200 1,700 17,224 17,224 The following relevant information needs to be taken into account: The company classifies its expenses using the function method. The financial director has identified three functions, namely sales, administration and distribution. The salaries and wages of 1,200,000 are allocated 700,000 to the administration function and 500,000 to the distribution function. 100,000 of the other costs are prepaid and 70,000 are accrued. The other costs are allocated 50% to the administration function and 50% to the distribution function. These costs include expenses for rent, advertising and repairs and are all individually immaterial. The equipment is all used within the administrative function and the leased vehicles are all used within the distribution function. Any bad debts are allocated to the administration function. The company regards any expenses over 100,000 as material. the equipment was purchased on March 2012 a cost of 1.740.000. AL quisition, the used the was estimated at seven years and the residual value estimated 660,000. During the year ended 28 February 20X5. mesel He was re-estimated at eight years and the residual value estimated to be pero . On 1 March 2014 Strapicentered into a leasement with Bonds pic for the lease of fleet of delivery vehicles. The contracts as Thelone agreement requires the Stream plc to pay fonetimes of 565.000 mars on 28 February each year. The present value of future lease payments inception of these is 2.000.000 discounted at the implot interest rate of 12% per avum The estimated selle of the vehicles is five years and the estimated residual aloe is 2000 The only entry recorded in respect of the lease core is the recognition of the right of usease and fasebiyat inception .O 28 February 20x5 the investment property was measured at its far vale 2.100.000 The investment property was purchased on September 2012 and held so com rental income. The investment property is measured using the fair . The doing inventory stable value of 1,165.000 and the accounts receivable expected to raise 6.000 . The expense for the year has not been recorded the corporation to rates 20% Dividends of sixpence per share were declared and approved a shareholder meeting on 25 March 2005. The financial statements were authorised toon 30 March 2015 Required: a) Prepare the statement of comprehensive income of Be Stream pic for the year ended 28 February 2oxs, in accordance with International Financial Reporting Standards Present your answer to the nearest 2000 115 marks) Prepare the statement of financial position of Blue Streep 28 February 2005 In accordance with international Financial Reporting Standards Present your answer the rest 000 Blue Stream plc is a small company with interests in retailing and property. The financial director of Blue Stream plc is currently finalising the financial statements for the year ended 28 February 20X5. The trial balance at that date is shown below: BLUE STREAM plc TRIAL BALANCE AT 28 FEBRUARY 20X5 Debit 000 Credit 000 2.500 1,424 1,950 1,740 480 2,000 2,000 Ordinary share capital (1 par value) Retained earnings at 28 February 20X4 Investment property: Fair value (at 28 February 20X4) Equipment: Cost Equipment: Accumulated depreciation (at 28 February 20X4) Right of use asset Lease liability Accounts receivable Inventory at cost HMRC / Tax authority Cash at bank Accounts payable Sales Cost of sales Rental income Salaries and wages Other costs 1,115 1,245 200 974 870 9,850 5,100 100 1,200 1,700 17,224 17,224 The following relevant information needs to be taken into account: The company classifies its expenses using the function method. The financial director has identified three functions, namely sales, administration and distribution. The salaries and wages of 1,200,000 are allocated 700,000 to the administration function and 500,000 to the distribution function. 100,000 of the other costs are prepaid and 70,000 are accrued. The other costs are allocated 50% to the administration function and 50% to the distribution function. These costs include expenses for rent, advertising and repairs and are all individually immaterial. The equipment is all used within the administrative function and the leased vehicles are all used within the distribution function. Any bad debts are allocated to the administration function. The company regards any expenses over 100,000 as material. the equipment was purchased on March 2012 a cost of 1.740.000. AL quisition, the used the was estimated at seven years and the residual value estimated 660,000. During the year ended 28 February 20X5. mesel He was re-estimated at eight years and the residual value estimated to be pero . On 1 March 2014 Strapicentered into a leasement with Bonds pic for the lease of fleet of delivery vehicles. The contracts as Thelone agreement requires the Stream plc to pay fonetimes of 565.000 mars on 28 February each year. The present value of future lease payments inception of these is 2.000.000 discounted at the implot interest rate of 12% per avum The estimated selle of the vehicles is five years and the estimated residual aloe is 2000 The only entry recorded in respect of the lease core is the recognition of the right of usease and fasebiyat inception .O 28 February 20x5 the investment property was measured at its far vale 2.100.000 The investment property was purchased on September 2012 and held so com rental income. The investment property is measured using the fair . The doing inventory stable value of 1,165.000 and the accounts receivable expected to raise 6.000 . The expense for the year has not been recorded the corporation to rates 20% Dividends of sixpence per share were declared and approved a shareholder meeting on 25 March 2005. The financial statements were authorised toon 30 March 2015 Required: a) Prepare the statement of comprehensive income of Be Stream pic for the year ended 28 February 2oxs, in accordance with International Financial Reporting Standards Present your answer to the nearest 2000 115 marks) Prepare the statement of financial position of Blue Streep 28 February 2005 In accordance with international Financial Reporting Standards Present your answer the rest 000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Futures And Options Markets

Authors: John C. Hull

7th Edition

0136103227, 9780136103226

More Books

Students also viewed these Finance questions

Question

Find each product. 3 7 3 89 .

Answered: 1 week ago