PREPARE THE STATEMENT OF PROFIT OR LOSS FOR HEXHAM PLC FOR THE YEAR ENDED 31 MARCH 20X8 AND THE STATEMENT OF FINANCIAL POSITION AT THAT DATE.

Chapter 12: Company financial statements under 1FRS Hexham plc The following trial balance was extracted from the nominal ledger of Hexham plc on 31 March 20x8: 1,150,000 Sales Inventories at 1 April 20X7 75,000 Purchases 465,000 Distribution costs 220,000 Administrative expenses 340,000 Irrecoverable debts expense 36,000 Loan interest paid 8,000 Land and buildings cost 600,000 Plant and equipment cost 340,000 Land and buildings accumulated depreciation at 1 April 20X7 96,000 Plant and equipment accumulated depreciation at 1 April 20X7 63,000 Trade receivables 60,000 Allowance for receivables 5,000 Bank 24,000 Equity share capital (f1 shares) 400,000 Share premium 100,000 Bank loan 200,000 Retained earnings 61,000 Equity dividends paid 15,000 Accounts payable 54,000 Advance deposits from customers 6,000 2,15 59,000 The following adjustments have yet to be accounted for: 1 Hexham plc holds two lines of inventory at 31 March 20X8. Details are as follows: BY200 Item CX100 Total cost 16,200 76,000 Selling price 15,000 83,600 2 Hexham plc paid an annual insurance premium of 16,800 for the year 1 September 20x7 to 31 August 20X8. This payment is included in administrative expenses. 3 The company's depreciation policy is as follows: Buildings Straight-line over 50 years 10% straight-line Plant and equipment The cost of the land was E200,000, and all non-current assets are assumed to have zero residual values. There were no additions to or disposals of non-current assets during the year ended 31 March 20X8. Depreciation on buildings is charged to administrative expenses, and depreciation on plant and equipment is charged to cost of sales. 4 At the year end, trade receivables include a balance of 4,800 which is considered irrecoverable. Hexham Plc wishes to adjust the allowance for receivables at 31 March 20X8 to 2,760. The company presents irrecoverable debts as other operating expenses on the face of the statement of profit or loss