Task 1 (25 marks)

By using excel, solve the following

You are provided with the Trial Balance for Caversham Hotels, for the year ended 31 December 2020 together with additional information. You have been requested to construct the financial statements for the year ended 31 December 2020.

You are required to prepare:

• The Income Statement (10 marks)
• The Statement of Financial Position (15 marks).

Caversham Hotels Trial Balance for the year ended 31 December 2020

	Debit	Credit
	000	000
Revenue		7,500
Opening Inventory	225
Purchases	5,475
Administration expenses	315
Interest received		26
Interest paid	375
Property (Cost)	16,500
Accumulated Depreciation b/f		1,688
Trade receivables	205
Cash at bank	225
Trade payables		450
Long-term loan		4,950
Share capital		4,200
Share premium		1,210
Retained profits (b/f)		3,296
Total	23,320	23,320

Additional information:

• The closing inventory is valued at 240,000.
• The Administrative expenses includes 47,000 for utility bills paid during the year, 3,000 of which was for an accrual for the year ending 2018. The utility bills for the last month of the 2019 financial year have not been received and an accrual needs to be provided for.
• Irrecoverable debts of 5,000 are to be provided for. A further allowance of 1% of the outstanding balance is also to be provided.
• Property is to be depreciated over 50 years on a straight line basis. The estimated residual value is 2,000,00