The following balances were obtained from the books of KLM plc as at December 31,2018 ; Additional information: a. Provide for depreciation as follows: fixtures and fittings 5% on cost, and motor vehicles 10% on cost. Depreciation charges should be applied equally between selling costs and administration expenses b. Wages and salaries is owing by $10,000, and insurance is owing by $5,000 c. The total preference share dividend is to be honoured d. The followine exnenses must be annronriated: e. Goodwill impairment was estimated to be $30,000 f. Corporation tax is estimated at $25,000 g. Transfer $25,000 to general reserves Required: Prepare the following financial statements for the year: i. Statement of profit or loss ii. Statement of changes in equity iii. Statement of financial position Additional questions 1. Discuss the implications of each of the following situations to a business organization: - separate legal identity - limited liability - going concern 2. What are the advantages and disadvantages of a company relative to a sole proprietorship or partnership? 3. Explain the sources of financing in a company. 4. Explain the following non-eash dividend options: - bonus issue of shares - rights issues of shares 5. Explain the following terms: - participatory preference shares - cumulative preference shares - convertible loan stock 6. Distinguish between "revenue reserves' and 'capital reserves.' The following balances were obtained from the books of KLM plc as at December 31,2018 ; Additional information: a. Provide for depreciation as follows: fixtures and fittings 5% on cost, and motor vehicles 10% on cost. Depreciation charges should be applied equally between selling costs and administration expenses b. Wages and salaries is owing by $10,000, and insurance is owing by $5,000 c. The total preference share dividend is to be honoured d. The followine exnenses must be annronriated: e. Goodwill impairment was estimated to be $30,000 f. Corporation tax is estimated at $25,000 g. Transfer $25,000 to general reserves Required: Prepare the following financial statements for the year: i. Statement of profit or loss ii. Statement of changes in equity iii. Statement of financial position Additional questions 1. Discuss the implications of each of the following situations to a business organization: - separate legal identity - limited liability - going concern 2. What are the advantages and disadvantages of a company relative to a sole proprietorship or partnership? 3. Explain the sources of financing in a company. 4. Explain the following non-eash dividend options: - bonus issue of shares - rights issues of shares 5. Explain the following terms: - participatory preference shares - cumulative preference shares - convertible loan stock 6. Distinguish between "revenue reserves' and 'capital reserves
