Question
Question One: The following data extracted from the trial balance of ABC Company on Dec 31 st 2020: Financial Statement item Amount Financial Statement Item
Question One:
The following data extracted from the trial balance of ABC Company on Dec 31st 2020:
Financial Statement item | Amount | Financial Statement Item | Amount |
Buildings | 1,200,000 | Motor vehicles Accumulated depreciations | 180,000 |
Cash | 320,000 | Depreciation expenses | 630,000 |
Sales revenues | 16,000,000 | Purchases returns and allowance | 96,000 |
Sales commission | 120,000 | Interest expenses | 1,150,000 |
Travel expense - sale | 75,000 | Gains on sale of lands | 455,000 |
Equipment | 840,000 | Notes payable | 2,890,000 |
Account payable | 420,000 | Equipment accumulated depreciation | 440,000 |
Goodwill | 3,000,000 | Impairment loss equipment | 260,000 |
Purchases | 6,400,000 | Accumulated unrealized gains of non-trading securities | 265,000 |
Trading securities | 1,460,000 | Sales returns and allowance | 215,000 |
Account receivables | 810,000 | Customs and taxes purchases | 1,045,000 |
License | 475,000 | Utilities expenses | 167,500 |
Audit fees | 90,000 | Customer list | 300,000 |
Freight in | 85,000 | Loss due to an earthquake damage | 618,000 |
Repair expenses | 76,000 | Interest revenues | 148,000 |
Purchases discount | 128,000 | loss on operation of the disposed division | 195,000 |
Beginning inventory | 1,487,500 | Legal and accounting expenses | 47,000 |
Share capital ordinary | 4,250,000 | Buildings Accumulated depreciation | 280,000 |
Advertising expenses | 630,000 | Unearned revenues | 215,000 |
Supplies | 112,000 | Furniture and computers | 350,000 |
Prepaid insurance | 120,000 | Leasing liabilities | 3,400,000 |
Notes receivables | 1,650,000 | Share premium preference | 675,000 |
Bonds payables | 5,000,000 | Share premium treasury | 180,000 |
Wages payable | 62,000 | Retained earnings | ?? |
Dividends revenues | 243,000 | Accumulated revaluation surplus | 220,000 |
Sales discount | 145,000 | Non-trading securities | 5,575,000 |
Trade payables | 88,000 | Gains on currency exchange | 140,000 |
Lands | 3,050,000 | Legal reserve | 312,500 |
Delivery expenses | 313,000 | Share premium ordinary | 2,000,000 |
Rent expenses | 94,000 | Patent | 960,000 |
Insurance expense | 40,000 | Treasury shares (400,000 * 3) | 1,200,000 |
Motor vehicles | 1,550,000 | Held to maturity investment | 3,417,000 |
Revaluation surplus | 150,000 | Salaries and wages expenses | 1,180,000 |
Share capital preference | 2,000,000 | Investment in preference shares | 2,100,000 |
Franchise | 1,450,000 | Allowance for doubtful accounts | 60,000 |
Mortgage payable | 900,000 | Loss on disposal of Salmya Branch assets | 324,000 |
Dividends declared | 700,000 | Loss on sales of trading securities | 81,500 |
Land for speculations | 650,000 | Buildings to lease out | 1,850,000 |
Additional Information that was not included in the trial balance:
- The number of ordinary shares is 10,000,000 shares authorized, 4,250,000 issued and 3,850,000 outstanding.
- There are 10 KD par, (10%), 200,000 authorized, issued and outstanding preference shares.
- 10% of the account receivables will be collected in 2022.
- The insurance policy was purchased on Jan 1st 2020 for 160,000 KD and covers 4 years. One fourth of the amount was expensed as insurance expense during 2020 and the rest 120,000 will be expensed over the coming three years.
- 50,000 KD of the mortgage payable due during next year.
- 200,000 KD of the dividends declared foe preference shares
- 150,000 KD of the notes receivables due next year
- Salaries and wages expenses are 60% sales and 40% offices
- Depreciation expenses are 20% sales and 80% offices.
- Ending inventories was evaluated at 1,225,000 KD on Dec 31st 2020
- 400,000 KD of the leasing liabilities due next year.
- Utilities expenses are 30% sales and 70% offices.
- 490,000 KD of the notes payable due next year.
- Fair value of trading securities on Dec 31st 2020 is 1,615,000 KD
- Fair value of non-trading securities on Dec 31st 2020 is 6,450,000 KD
- Goodwill was revalued during the period at 4,000,000 KD.
- Patent was impaired by 260,000 but it has not been recognized.
- The company is subject to 30% income tax on all items.
Required:
- Prepare trial balance for ABC Company on Dec 31st 2020 and calculate retained earnings beginning balance?
- Prepare statement of comprehensive income, retained earnings statement and statement of financial position for ABC Company in good format and according to the requirements of IAS 1?
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