QUESTION $1$

Mike has presented you with the following balances for the year ended September $30,2023$:

$ $

Creditors $22,500$

Sales Revenue $1,143,700$

Land at cost $550,000$

Building at cost $570,000$

Furniture and fittings at cost $85,000$

Bank $14,000$

Provision for Depreciation

Buildings $120,000$

Furniture and fittings $15,000$

Discounts $5,7005,800$

Retained Earnings at $1$ Oct $202214,800$

Provision for bad debts $2,200$

Goodwill $400,000$

Cash $16,400$

Inventory at $1$ Oct $202248,000$

Rent Received$($from Breezy Ltd$)27,000$

Rent $7,900$

Wages and Salaries $122,000$

Insurance $16,300$

Carriage Inwards $2,300$

Returns $8,50012,000$

Commission received $5,200$

$8\%$ Mortgage $100,000$

Other Operating Expenses $2,500$

Debtors $45,000$

Purchases $340,000$

Debenture Interest $1,200$

Mortgage Interest $4,600$

Bad debt $4,700$

$7\%$ Debentures $150,000$

$4\%$ Preference Shares @ $$0\mathrm{.}5130,000$

Ordinary Shares @ $$0\mathrm{.}75375,000$

General Reserves $127,000$

Interim ordinary dividends paid $4,500$

$2,249,4002,249,400$

The following additional information is available:

$1.$ At September $30,2023$ closing inventory was $$32,000$

$2.$ The Accountant has determined that the estimate for the provision for bad debts at September $30,2023$ is $10\%$ of debtors.

$3.$ At the end of the period it was discovered that one employee was owed $$2,000$ in salaries while another was overpaid by $$4,000.$ Additionally insurance prepaid was $$300$

$4.$ The following appropriation of the expenses must be made

Admin Selling & Dist

Rent $80\%20\%$

Wages & Salaries $60\%40\%$

Insurance $50\%50\%$

Prov. for Depreciation $70\%30\%$

$5.$ On June $1,2023$ the company rented some of its office space to Breezy Ltd$.$ At that date Breezy Ltd paid rent covering the next nine months.

$6.$ Depreciation should be provided as follows:

Land Nil

Buildings $2$ percent per year on cost

Furniture & Fittings $20$ percent per year on reducing balance

$7.$ Goodwill impairment was estimated to be $20\%.$

$8.$ Corporation tax is estimated to be $$42,000$

$9.$ The directors proposed on September $20,2023$ to pay the final preference dividends.

At a board of directors meeting on October $19,2023$ the directors evaluated the performance of the business over the past financial year and proposed to pay a further $6\%$ ordinary dividend.

Required:

$($a$)$ Prepare the following for Rhone Ltd for the financial year ending September $30,2023$:

$1.$ Statement of Profit or Loss $(20$ marks$)$

$2.$ Statement of changes in equity $(10$ marks$)$

$3.$ Statement of Financial Position. $(15$ marks$)$