Sample Company Account Question You are provided with the trial balance of Twirl Ltd. as at...
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Sample Company Account Question You are provided with the trial balance of Twirl Ltd. as at 31st December 2019: Bank 78,000 Ordinary shares at 1 each Retained earnings at 1st January 2019 216,000 476,400 Share premium 26,160 Vehicles at cost 585,600 Buildings at cost 1,050,000 Equipment at cost 787,200 Accumulated depreciation at 1st January 2019: Vehicles 148,800 Buildings 132,000 Equipment 246,240 Inventory at 1st January 2019 159,600 Allowance for bad debts at 1 January 2019 2% Debentures Revenue 10,800 1,260,000 2,098,200 Purchases 835,200 Directors fees 150,000 General administration costs 150,840 Wages and Salaries 261,600 General distribution costs 208,800 Rents received Bad debts Heat, Light and Power Dividends paid Advertising Insurance Discounts received Purchases returns Debenture interest Trade receivables 24,000 38,400 9,600 32,400 4,440 23,400 54,000 20,880 25,200 498,000 184,800 Trade payables 4,898,280 4,898,280 ......Question one continued 3. After the end of the financial year the finance director discovered that a customer owing a balance of 45,000 has gone into liquidation and will be unable to pay. The finance director has subsequently reviewed the trade receivables listing and believes that the allowance for doubtful debts should be set at 8% of the remaining trade receivables (debtors) balance. 4. The corporation tax liability for the year to 31st December 2019 is estimated to be 62,000 and should be provided for. 5. The company's depreciation policy is as follows: Buildings: Equipment: Vehicles: 2% per annum straight-line Reducing balance - 10% per annum 20% per annum straight-line In all cases, a full year's depreciation is charged in the year of acquisition and none in the year of disposal. Depreciation on non-current assets is charged to administration expenses. 6. During the year the company disposed of equipment which had cost 80,000 and had a net book value of 38,000 at the date of disposal. The sale proceeds were agreed at 50,000. No entries have been made in the accounts in respect of this transaction. 7. The insurance amount in the trial balance represents a payment for insurance for the twelve months ending 30th April 2020. 8. One quarter of wages and salaries were paid to distribution staff and the remaining three quarters were paid to administrative staff. Required: (Using the published format under IAS1) You are provided with the following information: 1. The company's inventory at 31st December 2019 is valued at cost of 153,000. 2. A dividend of 0.15 per ordinary share was paid to shareholders on 31st October 2019. No further dividends are proposed for the year ended 31 December 2019. Question one continues on the next page....... (b) Prepare a Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2019. (c) Prepare a Statement of Changes in Equity for the year ended 31 December 2019. (d) Prepare a Statement of Financial Position as at 31 December 2019. END OF QUESTION Sample Company Account Question You are provided with the trial balance of Twirl Ltd. as at 31st December 2019: Bank 78,000 Ordinary shares at 1 each Retained earnings at 1st January 2019 216,000 476,400 Share premium 26,160 Vehicles at cost 585,600 Buildings at cost 1,050,000 Equipment at cost 787,200 Accumulated depreciation at 1st January 2019: Vehicles 148,800 Buildings 132,000 Equipment 246,240 Inventory at 1st January 2019 159,600 Allowance for bad debts at 1 January 2019 2% Debentures Revenue 10,800 1,260,000 2,098,200 Purchases 835,200 Directors fees 150,000 General administration costs 150,840 Wages and Salaries 261,600 General distribution costs 208,800 Rents received Bad debts Heat, Light and Power Dividends paid Advertising Insurance Discounts received Purchases returns Debenture interest Trade receivables 24,000 38,400 9,600 32,400 4,440 23,400 54,000 20,880 25,200 498,000 184,800 Trade payables 4,898,280 4,898,280 ......Question one continued 3. After the end of the financial year the finance director discovered that a customer owing a balance of 45,000 has gone into liquidation and will be unable to pay. The finance director has subsequently reviewed the trade receivables listing and believes that the allowance for doubtful debts should be set at 8% of the remaining trade receivables (debtors) balance. 4. The corporation tax liability for the year to 31st December 2019 is estimated to be 62,000 and should be provided for. 5. The company's depreciation policy is as follows: Buildings: Equipment: Vehicles: 2% per annum straight-line Reducing balance - 10% per annum 20% per annum straight-line In all cases, a full year's depreciation is charged in the year of acquisition and none in the year of disposal. Depreciation on non-current assets is charged to administration expenses. 6. During the year the company disposed of equipment which had cost 80,000 and had a net book value of 38,000 at the date of disposal. The sale proceeds were agreed at 50,000. No entries have been made in the accounts in respect of this transaction. 7. The insurance amount in the trial balance represents a payment for insurance for the twelve months ending 30th April 2020. 8. One quarter of wages and salaries were paid to distribution staff and the remaining three quarters were paid to administrative staff. Required: (Using the published format under IAS1) You are provided with the following information: 1. The company's inventory at 31st December 2019 is valued at cost of 153,000. 2. A dividend of 0.15 per ordinary share was paid to shareholders on 31st October 2019. No further dividends are proposed for the year ended 31 December 2019. Question one continues on the next page....... (b) Prepare a Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2019. (c) Prepare a Statement of Changes in Equity for the year ended 31 December 2019. (d) Prepare a Statement of Financial Position as at 31 December 2019. END OF QUESTION
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To prepare the financial statements for Twirl Ltd for the year ended 31 December 2019 we will start with the Statement of Profit or Loss and Other Com... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-1119048534
11th Canadian edition Volume 1
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy
Posted Date:
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