Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Following were the closing balances of the accounts of Pear Limited for the year ended 30 September 20 8 before adjustments (Figures are in thousands):

image text in transcribedimage text in transcribed

Following were the closing balances of the accounts of Pear Limited for the year ended 30 September 20 8 before adjustments (Figures are in thousands): Following were the adjustments found on September 30: 1. Depreciation has not been charged on office equipment with a carrying amount of $100,000. This class of assets is depreciated at 12 per cent a year using the reducing-balance method. 2. A new machine was purchased, on credit, for $30,000 and delivered on 29 September 20x8 but has not been included in the financial statements. (Depreciation will not apply on equipment bought during the month according to the company policy.) 3. A sales invoice to the value of $18,000 for September 20x8 has been omitted from the financial statements. (The cost of sales figure is stated correctly.) 4. The interest payable on the loan notes for the second half-year was not paid until 1 October 208 and has not been included in the financial statements. 5. A dividend of $25,000 had been approved by the shareholders before 30 September 208, but was unpaid at that date. This is not reflected in the financial statements. (Dividend payout from Retained Earnings.) 6. Bad debts are to be written off representing 2 per cent of trade receivables outstanding at the year-end. 7. An invoice for electricity to the value of $2000 for the quarter ended 30 September 20x8 arrived on 4 October and has not been included in the financial statements. 8. The charge for taxation will have to be amended to take account of the above information. Make the simplifying assumption that tax is payable shortly after the end of the year at the rate of 30 per cent of the profit before tax. Prepare the Statement of Comprehensive Income and Statement of Financial Position showing the Working Capital after adjustments. (40 marks) Following were the closing balances of the accounts of Pear Limited for the year ended 30 September 20 8 before adjustments (Figures are in thousands): Following were the adjustments found on September 30: 1. Depreciation has not been charged on office equipment with a carrying amount of $100,000. This class of assets is depreciated at 12 per cent a year using the reducing-balance method. 2. A new machine was purchased, on credit, for $30,000 and delivered on 29 September 20x8 but has not been included in the financial statements. (Depreciation will not apply on equipment bought during the month according to the company policy.) 3. A sales invoice to the value of $18,000 for September 20x8 has been omitted from the financial statements. (The cost of sales figure is stated correctly.) 4. The interest payable on the loan notes for the second half-year was not paid until 1 October 208 and has not been included in the financial statements. 5. A dividend of $25,000 had been approved by the shareholders before 30 September 208, but was unpaid at that date. This is not reflected in the financial statements. (Dividend payout from Retained Earnings.) 6. Bad debts are to be written off representing 2 per cent of trade receivables outstanding at the year-end. 7. An invoice for electricity to the value of $2000 for the quarter ended 30 September 20x8 arrived on 4 October and has not been included in the financial statements. 8. The charge for taxation will have to be amended to take account of the above information. Make the simplifying assumption that tax is payable shortly after the end of the year at the rate of 30 per cent of the profit before tax. Prepare the Statement of Comprehensive Income and Statement of Financial Position showing the Working Capital after adjustments. (40 marks)

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

Managerial Accounting Tools For Business Decision Making Wileyplus Lms Student Package

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

8th Edition

1119390249, 978-1119390244

More Books

Students also viewed these Accounting questions

Question

sharing of non-material benefits such as time and affection;

Answered: 1 week ago