Preparation of financial statements

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In this section, you are required to$$Prepare a statement of profit or loss, a statement of changes in equity and a statement of financial position to comply with the requirements of IAS $1$ Presentation of Financial Statements. You can then use those answers to fill in this section.

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Enter numbers only $($e$.$g$.$ if the answer is $$1,000\mathrm{.}00)$ enter$$ only $1000$ with no currency symbol, no decimal points and no comma

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On $31$ December $20$X$2$ the accounting records of Rulers, a limited liability company, contained the following balances. $$000$ $$1$ ordinary shares $500$ $$110\%$ irredeemable preference shares $100$ Share premium $200$ Retained earnings $1$ January $20$X$2455$ Land $200$ Plant and machinery $$ cost $550$ depreciation $1$ January $20$X$2250$ Revenue $3,500$ Cost of sales $2,100$ Inventory $600$ Receivables $550$ Bank $($debit balance$)350$ Operating expenses $400$ Management expenses $280$ Selling expenses $22010\%$ Loan notes $100$ Payables $200$ Irrecoverable debts $5$ Allowance for receivables $1$ January $20$X$26$ Interest received $7$ Discounts allowed $8$ Ordinary shares dividend $55$

The following notes need additionally to be taken into account.

$($a$)$ Bank charges $$2,000$ and a standing order receipt of $$50,000$ from a customer have been omitted.

$($b$)$ The allowance for receivables is required to be the equivalent of $1\%$ of receivables.

$($c$)$ Loan note interest needs to be provided for.

$($d$)$ The preference dividend was declared in December $20$X$2.$

$($e$)$ The ordinary shares dividend of $$55,000$ was proposed in December $20$X$1,$ declared in February $20$X$2$ and paid in March $20$X$2.$ A final ordinary dividend of $14$c per share is proposed. $($f$)$ Depreciation on plant and machinery is to be allowed at $20\%$ on the reducing balance method. $10\%$ of this depreciation relates to general management and $5\%$ to selling. $($g$)$ The land is to be revalued upwards by $$30,000.($h$)$ A tax provision of $$150,000$ is required.

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$1.$What is the company's distribution cost charge to profit or loss for the year?

Enter number only. E$.$g$.$ if the answer is $$2,800\mathrm{.}00$ enter only $2800$

Your answer

$2.$ What is the company's interest income to profit or loss for the year?

Enter number only. E$.$g$.$ if the answer is $$2,800\mathrm{.}00$ enter only $2800$

Your answer

What is the company's gross profit for the year?

Enter number only. E$.$g$.$ if the answer is $$2,800\mathrm{.}00$ enter only $2800$

Your answer

$3.$ What is the closing balance on retained earnings in the statement of changes in equity?

Enter number only. E$.$g$.$ if the answer is $$2,800\mathrm{.}00$ enter only $2800$

Your answer

$4.$ What is the company's finance cost charged to profit or loss as an interest expense for the year?

Enter number only. E$.$g$.$ if the answer is $$2,800\mathrm{.}00$ enter only $2800$

Your answer

$5.$ What is the company's administration cost charge to profit or loss for the year?

Enter number only. E$.$g$.$ if the answer is $$2,800\mathrm{.}00$ enter only $2800$

Your answer

$6.$ From the company's statement of financial position, total assets $($current and non current$)$ as at end of the accounting year amount to$?$

Enter number only. E$.$g$.$ if the answer is $$2,800\mathrm{.}00$ enter only $2800$

Your answer

$7.$ What is the company's cost of sales for the year?

Enter number only. E$.$g$.$ if the answer is $$2,800\mathrm{.}00$ enter only $2800$

Your answer

$8.$ What is the company's revenue for the year?

Enter number only. E$.$g$.$ if the answer is $$2,800\mathrm{.}00$ enter only $2800$

Your answer

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$9.$ Andy has started a business and transferred his computer, worth $$1,500$ into the business. What are the accounting entries to record this?

A Dr Capital Cr Computer equipment

B Dr Computer equipment Cr Capital

C Dr Computer equipment Cr Drawings

D Dr Drawings Cr Computer equipment

$10.$ In a manufacturing business, which of the following is not a fixed asset?

Loose tools and equipment

Assembly plant

Delivery vans

Finished products

$11.$ Which of the following is a user of financial statements of a company

Management

Lenders and competitors

Shareholders and government

All of the above

$12.$ Which of the following correctly describes the concept of duality?

A Two nominal ledger accounts are required to record a transaction

B Transactions are recorded in day books and in ledgers

C If more than one debit entry is made and equal number of credit entries must also be made

D Every transaction recorded has an equal effect on both halves of the accounting equation

$13.$ The year end of M limited is $30$ November $20$X$0.$ The company pays for its gas by a standing order of $$600$ per month. On $1$ December $20$W$9,$ the statement from the gas supplier showed that M limited had overpaid by $$200.$ M limited received gas bills for the four quarters commencing on $1$ December $20$W$9$ and ending on $30$ November $20$X$0$ for $$1,300,$ $$1,400,$ $$2,100$ and $$2,000$ respectively. Which of the following is the correct charge for gas in M Limited's statement of profit and loss for the ye