Question

PORTFOLIO QUESTION 6 ( 45 minutes) The following balances have been extracted from the books of Hobson's Ltd on 31" December 2021. Using this information and the notes below, produce an Income Statement and Statement of Financial Position. CREDIT DEBIT 31,862 1,200 15,840 271,700 14,167 186,000 100,000 Salaries Debenture interest paid General expenses Sales Inventory 1"Jan 2021 Purchases Ordinary share capital (l nominal value, issued and fully paid) 6% Preference shares, 1 Share Premium Account Revaluation reserve General reserve Preference Dividends paid Retained Profit 31 December 2020 Vehicles at cost Depreciation on vehicles Payables Receivables 8% Debentures (repayable 2034) Provision for doubtful debts Bank 20,000 9.500 10,000 12,000 1,200 976 210,000 19,000 7,500 11.000 30,000 324 9,731 481,000 481,000 NOTES 1. Closing Inventory was valued at 23,483 2. Vehicles to be depreciated at 10% per annum straight line method 3. The provision for doubtful debts is to be 5% of debtors 4. 1,200 is owing for debenture interest and 1,437 is owing for general expenses 5. 925 of general expenses has been prepaid 6. Corporation tax is estimated to be 5,600 7. A final dividend on ordinary shares of 10,000 has been proposed 8. The directors have decided to increase the general reserve by a further 3,000