Question 1 (Total 70 marks) The following trial balance was extracted from the books of Bay Limited as at 31 March 2020: Credit $ 300,000 100,000 40,000 300,000 242,000 100,000 36,000 93,000 4,924,000 Trial Balance 13 March 2020 Debit $ Ordinary share capital General reserve Retained profits, at 1 April 2019 10% Debenture, repayable on 1 April 2030 Office equipment 380,000 Motor vans 400,000 Accumulated depreciation, at 1 April 2019 - Office equipment - Motor vans Trade receivables 199,360 Allowance for doubtful debts, at 1 April 2019 Trade payables Cash 273,320 Inventory, at 1 April 2019 300,000 Sales Purchases 2,455,000 Returns inwards 130,000 Returns outwards Bnd debts 10,000 Carriage inwards 36,120 Carriage outwards 42,020 Debenture interest 15,000 Discounts received Discounts allowed 5,380 Directors' remuneration 347,500 Insurance 30,250 Interim dividend 30,000 Motor van expenses 2,000 Other administrative expenses 2,500 Rent and rates 733,000 Salaries and wages 734,600 Water, electricity and gas 30,150 6,156,200 10,000 11,200 6,156,200 136,200 Page 2 Additional information: (1) Closing inventory at 31 March 2020 was valued at cost of $250,000 (2) Depreciation was to be provided for non-current assets as follows: Office equipment 20% per annum using straight-line method Motor vans 25% per annum using reducing balance method (3) Rent and rates included $240,000 rent paid for the period from 1 March 2020 to 31 May 2020. (4) Electricity for March 2020 of $8,000 were unpaid and unrecorded at 31 March 2020 (5) An amount of $30,000 owed by a credit customer had been determined as uncollectible. However, only $10,000 of the uncollectible amount had been written off and recorded in the books as bad debts. (6) Allowance for doubtful debts at 31 March 2020 was to be increased to $50,000 (7) Audit fee of 12.00 the accid March 2019. Rent and rates Salaries and wages Water, electricity and gns 734,600 30,150 6,156,200 6,156,200 Page 2 Additional information: (1) (2) Closing inventory at 31 March 2020 was valued at cost of $250,000. Depreciation was to be provided for non-current assets as follows: Office equipment 20% per annum using straight-line method Motor vans 25% per annum using reducing balance method Rent and rates included $240,000 rent paid for the period from 1 March 2020 to 31 May 2020. (3) (4) Electricity for March 2020 of $8,000 were unpaid and unrecorded at 31 March 2020. (5) An amount of $30,000 owed by a credit customer had been determined as uncollectible. However, only $10,000 of the uncollectible amount had been written off and recorded in the books as bad debts. (6) (7) Allowance for doubtful debts at 31 March 2020 was to be increased to $50,000 Audit fee of $13,000 was to be accrued at 31 March 2019. Debenture interest for 1 October 2019 to 31 March 2020 had not been paid for and recorded. (8) (9) Income tax for the year was estimated at $42,000. (10) On 31 March 2020, the board of directors had decided to transfer $60,000 from current year's profit to general reserve. Required: Prepare for Bay Limited, (a) a statement of profit or loss and other comprehensive income (with expenses classified by function) for the year ended 31 March 2020, and (38 marks) (b) a statement of financial position as at 31 March 2020. (32 marks) (Total 70 marks) Question 2 (Total 30 marks) The following summarized data are extracted from the financial statements of Gut Limited ("Gut") and Hey Limited ("Hey') for the year ended 31 December 2019. Ordinary share capital Bank loans long-term) Non-current assets, at net book value Closing inventory, al cost Trade receivables Gut $'000 200.000 95,000 180,000 16,500 Hey S'000 200,000 100,000 190,000 75,000 78,000 125.000 170 Question 1 (Total 70 marks) The following trial balance was extracted from the books of Bay Limited as at 31 March 2020: Credit $ 300,000 100,000 40,000 300,000 242,000 100,000 36,000 93,000 4,924,000 Trial Balance 13 March 2020 Debit $ Ordinary share capital General reserve Retained profits, at 1 April 2019 10% Debenture, repayable on 1 April 2030 Office equipment 380,000 Motor vans 400,000 Accumulated depreciation, at 1 April 2019 - Office equipment - Motor vans Trade receivables 199,360 Allowance for doubtful debts, at 1 April 2019 Trade payables Cash 273,320 Inventory, at 1 April 2019 300,000 Sales Purchases 2,455,000 Returns inwards 130,000 Returns outwards Bnd debts 10,000 Carriage inwards 36,120 Carriage outwards 42,020 Debenture interest 15,000 Discounts received Discounts allowed 5,380 Directors' remuneration 347,500 Insurance 30,250 Interim dividend 30,000 Motor van expenses 2,000 Other administrative expenses 2,500 Rent and rates 733,000 Salaries and wages 734,600 Water, electricity and gas 30,150 6,156,200 10,000 11,200 6,156,200 136,200 Page 2 Additional information: (1) Closing inventory at 31 March 2020 was valued at cost of $250,000 (2) Depreciation was to be provided for non-current assets as follows: Office equipment 20% per annum using straight-line method Motor vans 25% per annum using reducing balance method (3) Rent and rates included $240,000 rent paid for the period from 1 March 2020 to 31 May 2020. (4) Electricity for March 2020 of $8,000 were unpaid and unrecorded at 31 March 2020 (5) An amount of $30,000 owed by a credit customer had been determined as uncollectible. However, only $10,000 of the uncollectible amount had been written off and recorded in the books as bad debts. (6) Allowance for doubtful debts at 31 March 2020 was to be increased to $50,000 (7) Audit fee of 12.00 the accid March 2019. Rent and rates Salaries and wages Water, electricity and gns 734,600 30,150 6,156,200 6,156,200 Page 2 Additional information: (1) (2) Closing inventory at 31 March 2020 was valued at cost of $250,000. Depreciation was to be provided for non-current assets as follows: Office equipment 20% per annum using straight-line method Motor vans 25% per annum using reducing balance method Rent and rates included $240,000 rent paid for the period from 1 March 2020 to 31 May 2020. (3) (4) Electricity for March 2020 of $8,000 were unpaid and unrecorded at 31 March 2020. (5) An amount of $30,000 owed by a credit customer had been determined as uncollectible. However, only $10,000 of the uncollectible amount had been written off and recorded in the books as bad debts. (6) (7) Allowance for doubtful debts at 31 March 2020 was to be increased to $50,000 Audit fee of $13,000 was to be accrued at 31 March 2019. Debenture interest for 1 October 2019 to 31 March 2020 had not been paid for and recorded. (8) (9) Income tax for the year was estimated at $42,000. (10) On 31 March 2020, the board of directors had decided to transfer $60,000 from current year's profit to general reserve. Required: Prepare for Bay Limited, (a) a statement of profit or loss and other comprehensive income (with expenses classified by function) for the year ended 31 March 2020, and (38 marks) (b) a statement of financial position as at 31 March 2020. (32 marks) (Total 70 marks) Question 2 (Total 30 marks) The following summarized data are extracted from the financial statements of Gut Limited ("Gut") and Hey Limited ("Hey') for the year ended 31 December 2019. Ordinary share capital Bank loans long-term) Non-current assets, at net book value Closing inventory, al cost Trade receivables Gut $'000 200.000 95,000 180,000 16,500 Hey S'000 200,000 100,000 190,000 75,000 78,000 125.000 170