Prepare the statement of profit or loss for the year ended 31st December 2019 and a statement of financial position as at that date in a format suitable for publication. Show all workings.
Question 1 SPECS Ltd is an office supplies retailer. The following trial balance was extracted from the books of the company on 31** December 2019. Dr Cr Premises at cost 926,250 Accumulated depreciation on premises 57,000 Equipment at cost 209,000 Accumulated depreciation on Equipment 104,500 Bank 47,500 Sales 1,710,000 Purchases 1,049,750 Discounts 85,500 Returns inwards Salaries 206,000 General expenses 99,750 Inventory 01/01/2019 152,000 Trade payables 272,500 Trade receivables 304,000 Administrative expenses 104,500 Provision for doubtful debts 01/01/2019 9,500 Directors remuneration 66,500 10% Debentures 171,000 6% Preference Shares 95,000 Ordinary Share Capital 598,500 3,151,000 3,151,000 33,250 The following additional information is provided: (a) Closing inventory at 31/12/2019 was valued at 71,250. (b) The expenses listed below should be apportioned as indicated: Cost of sales Distribution costs Administration costs 40% 35% 20% General expenses Salaries 40% 40% 25% (d) An invoice of 14,250 for General expenses for December 2019 has not been received yet. Bad debts of 19,000 are to be written off. The allowance for doubtful debts is to be increased to 5% of trade receivables outstanding at year end. Equipment are to be depreciated at 25% per year using the reducing balance method. The entire charge is to be allocated to cost of sales. Included in premises is land valued at 35.000 Buildings are to be depreciated 4% per annum straight line and it is to be allocated 40% to cost of sales, 20% to distribution and 40% to administration. Tax has been calculated at 42,750 for the year. The debentures listed include an amount of 35,000 that were issued on the 27th of December 2019 to reduce the overdraft, but this has not been added to the bank balance listed. (h) (1) 0 Question 1 SPECS Ltd is an office supplies retailer. The following trial balance was extracted from the books of the company on 31** December 2019. Dr Cr Premises at cost 926,250 Accumulated depreciation on premises 57,000 Equipment at cost 209,000 Accumulated depreciation on Equipment 104,500 Bank 47,500 Sales 1,710,000 Purchases 1,049,750 Discounts 85,500 Returns inwards Salaries 206,000 General expenses 99,750 Inventory 01/01/2019 152,000 Trade payables 272,500 Trade receivables 304,000 Administrative expenses 104,500 Provision for doubtful debts 01/01/2019 9,500 Directors remuneration 66,500 10% Debentures 171,000 6% Preference Shares 95,000 Ordinary Share Capital 598,500 3,151,000 3,151,000 33,250 The following additional information is provided: (a) Closing inventory at 31/12/2019 was valued at 71,250. (b) The expenses listed below should be apportioned as indicated: Cost of sales Distribution costs Administration costs 40% 35% 20% General expenses Salaries 40% 40% 25% (d) An invoice of 14,250 for General expenses for December 2019 has not been received yet. Bad debts of 19,000 are to be written off. The allowance for doubtful debts is to be increased to 5% of trade receivables outstanding at year end. Equipment are to be depreciated at 25% per year using the reducing balance method. The entire charge is to be allocated to cost of sales. Included in premises is land valued at 35.000 Buildings are to be depreciated 4% per annum straight line and it is to be allocated 40% to cost of sales, 20% to distribution and 40% to administration. Tax has been calculated at 42,750 for the year. The debentures listed include an amount of 35,000 that were issued on the 27th of December 2019 to reduce the overdraft, but this has not been added to the bank balance listed. (h) (1) 0
