Question 3

The following is the trial balance of Lift Ltd as at 31 December 20x9

Lift Ltd :Trial balance as at 31 December 20X9

						$	$
Issued ordinary share capital ( $ 1 shares )							250,000
Issued preference shares ( $ 1 share )							50,000
Retained earnings							36,313
Freehold land						320,000
Other non-current assets						195,000
Sales revenue							315,300
Purchases						165,090
Inventory 1.1.20X8						29,808
Rent						43,080
Salaries						32,877
General expenses						8,780
Directors' remuneration						15,000
10% Debenture							100,000
Debenture interest						10,000
Debtors and Creditors						23,976	21,211
Bank						29,013
General reserve							65,000
Provision for depreciation of other non-current assets							45,800
Interim dividends						11,000
						883,624	883,624

Additional information:

1. Inventory held at 31 December 20X9 was $23,444.
2. Depreciation is to be provided on other non-current assets at 5% using reducing balance. The company does not charge depreciation on freehold land.
3. Taxation for the year to be $9,100.
4. A transfer of $10,000 was to be made to the general reserve.
5. Salaries accrued at the year-end were $2,233.
6. Rent prepaid for the following year was $820.

Required:

1. Prepare the income statement of Lift Ltd for the year ended 31 December 20x9.

(18 marks)

2. Prepare the statement of changes in equity of Lift Ltd for the year ended 31 December 20x9. (7 marks)
3. Prepare the balance sheet of Lift Ltd as at 30 December 20x9. (25 marks)