Please answer the complete questions and post this second time please answer complete and correct
PRACTICE QUESTION - TB to FINANCIAL STATEMENTS using ETB The following trial balance was extracted from the books of Wiggo Ltd as at 31 December 20X1. '000 '000 19,600 11,400 2.940 1,960 1,800 2,400 720 2,434 WIGGO Ltd. Trial Balance at 31 December 20X1 Sales Cost of sales Selling and Distribution expenses Administration expenses Land Buildings - Cost Buildings - Depn at 1st Jan 20X1 Plant and Machinery - Cost Plant and Machinery - Depn at 1st Jan 20X1 Inventory at 31st December 20X1 Bank Loan (repayable 31st December 20X4) Bank Account Share Capital - Ordinary shares of 25p each Share Premium Retained Earnings Receivables Payables Suspense Account Sub-Totals 604 1,963 800 75 1,000 500 2.499 3,136 ENT 2.375 10 28.108 28,108 The following matters have not been taken into account in the preparation of the above trial balance and must be considered and appropriate adjustments made in the preparation of the financial statements. All figures below are '000 unless stated (a) The figure for closing inventory includes three product lines which required further clarification as to whether they were saleable or not. The . following information was ascertained from the production accountant Product Line Rowell King Trott Cost 150 100 50 Realisable Value 100 80 60 Product line Trott requires repairs at a cost of 20 which would allow them to be sold at 60. (b) b A valuation exercise on the land and buildings was performed prior to the year end with the aim of boosting the asset value of the company. The bookkeeper who produced the trial balance was unsure as to how to record this revaluation so no entries have been recorded. Land is to be re-valued to 2,500. Buildings are to be re-valued to 3,000 and their useful economic life assessed to be 15 years. Land is not depreciated but buildings are depreciated on a straight line basis and the charge allocated to expenses as follows 80% Cost of Sales Sales and Distribution Expenses Administration Expenses 10% 10% (c) During the year a piece of specialist production equipment was sold. The details of the asset disposed of are as follows: Original Cost 50 Accumulated Depreciation 20 Proceeds of Sale 10 The bookkeeper was unable to decide how to record this disposal and has made the following entry only in the trial balance. Dr Cash Suspense Account 10 10 Cr Any profit or loss on disposal of equipment should be recorded in cost of sales. Plant and machinery is to be depreciated at 20% on a reducing balance basis after any disposals and the charge allocated to expenses as follows 60% Cost of Sales Sales and Distribution Expenses Administration Expenses 20% 20% (d) The bookkeeper had omitted to accrue the interest cost on the bank loan. The annual rate of interest payable is 4%. (e) The shareholders approved and declared a final dividend of 8p per share for the financial period ending 31 December 20X0 at the AGM on 30th June 20X1. This dividend is to be paid on 31st January 20X2 for cash flow reasons. (1) The tax due on the profits for the year has been calculated at 620. REQUIRED: (Using the ETB method that has been demonstrated to you.) a) Prepare a statement of Profit or Loss and Comprehensive Income for the year ended 31 December 20X1. b) Prepare a Statement of Changes in Equity for the year ended 31 December 20X1. c) Prepare a Statement of Financial Position as at 31 December 20X1. PRACTICE QUESTION - TB to FINANCIAL STATEMENTS using ETB The following trial balance was extracted from the books of Wiggo Ltd as at 31 December 20X1. '000 '000 19,600 11,400 2.940 1,960 1,800 2,400 720 2,434 WIGGO Ltd. Trial Balance at 31 December 20X1 Sales Cost of sales Selling and Distribution expenses Administration expenses Land Buildings - Cost Buildings - Depn at 1st Jan 20X1 Plant and Machinery - Cost Plant and Machinery - Depn at 1st Jan 20X1 Inventory at 31st December 20X1 Bank Loan (repayable 31st December 20X4) Bank Account Share Capital - Ordinary shares of 25p each Share Premium Retained Earnings Receivables Payables Suspense Account Sub-Totals 604 1,963 800 75 1,000 500 2.499 3,136 ENT 2.375 10 28.108 28,108 The following matters have not been taken into account in the preparation of the above trial balance and must be considered and appropriate adjustments made in the preparation of the financial statements. All figures below are '000 unless stated (a) The figure for closing inventory includes three product lines which required further clarification as to whether they were saleable or not. The . following information was ascertained from the production accountant Product Line Rowell King Trott Cost 150 100 50 Realisable Value 100 80 60 Product line Trott requires repairs at a cost of 20 which would allow them to be sold at 60. (b) b A valuation exercise on the land and buildings was performed prior to the year end with the aim of boosting the asset value of the company. The bookkeeper who produced the trial balance was unsure as to how to record this revaluation so no entries have been recorded. Land is to be re-valued to 2,500. Buildings are to be re-valued to 3,000 and their useful economic life assessed to be 15 years. Land is not depreciated but buildings are depreciated on a straight line basis and the charge allocated to expenses as follows 80% Cost of Sales Sales and Distribution Expenses Administration Expenses 10% 10% (c) During the year a piece of specialist production equipment was sold. The details of the asset disposed of are as follows: Original Cost 50 Accumulated Depreciation 20 Proceeds of Sale 10 The bookkeeper was unable to decide how to record this disposal and has made the following entry only in the trial balance. Dr Cash Suspense Account 10 10 Cr Any profit or loss on disposal of equipment should be recorded in cost of sales. Plant and machinery is to be depreciated at 20% on a reducing balance basis after any disposals and the charge allocated to expenses as follows 60% Cost of Sales Sales and Distribution Expenses Administration Expenses 20% 20% (d) The bookkeeper had omitted to accrue the interest cost on the bank loan. The annual rate of interest payable is 4%. (e) The shareholders approved and declared a final dividend of 8p per share for the financial period ending 31 December 20X0 at the AGM on 30th June 20X1. This dividend is to be paid on 31st January 20X2 for cash flow reasons. (1) The tax due on the profits for the year has been calculated at 620. REQUIRED: (Using the ETB method that has been demonstrated to you.) a) Prepare a statement of Profit or Loss and Comprehensive Income for the year ended 31 December 20X1. b) Prepare a Statement of Changes in Equity for the year ended 31 December 20X1. c) Prepare a Statement of Financial Position as at 31 December 20X1
