Question
Mu Ltd Date: 30 September 2024 Trial Balance: Description Dr (000) Cr (000) Bank overdraft 205 Called-up share capital (ordinary shares of 1 each)
Mu Ltd
Date: 30 September 2024
Trial Balance:
Description | Dr (£000) | Cr (£000) |
Bank overdraft | 205 | |
Called-up share capital (ordinary shares of £1 each) | 5,000 | |
Accounts payable | 235 | |
Accounts receivable | 215 | |
Non-current assets: at cost | 670 | |
Accumulated depreciation (at 1 October 2023) | 490 | |
Marketing expenses | 470 | |
Office expenses | 500 | |
Retained profits (at 1 October 2023) | 570 | |
Production expenses | 5,900 | |
Purchases (net of VAT) | 7,300 | |
Sales (amounts invoiced, net of VAT) | 14,600 | |
Inventory (at 1 October 2023) | 490 | |
Trade accounts payable | 520 | |
Trade accounts receivable | 6,000 | |
Total | 13,710 | 13,710 |
Additional Information:
- Inventory at 30 September 2024 was valued at £560,000.
- At 30 September 2024, £200,000 was owing for office expenses, and £190,000 had been paid in advance for marketing expenses.
- A customer had gone into liquidation owing the company £660,000; the company does not expect to recover any of this debt.
- The company decides to set up an allowance for doubtful debts amounting to 5% of the outstanding trade accounts receivable as at the end of each financial year.
- Depreciation is to be charged on the non-current assets at a rate of 20% on cost; it is to be apportioned as follows:
- Marketing: 20%
- Office: 30%
- Production: 50%
Note:
There were no acquisitions or disposals of non-current assets during the year to 30 September 2024.
Prepare Mu Ltd’s income statement for the year ending 30 September 2024, and a balance sheet as at that date.
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