Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following is the extracted balances as at 31 December 2018 of William Limited, i. Inventory at 31 December 2018cost$45,000. Included in the inventory are

image text in transcribed
image text in transcribed
image text in transcribed
The following is the extracted balances as at 31 December 2018 of William Limited, i. Inventory at 31 December 2018cost$45,000. Included in the inventory are items which cost $1,400 which are now obsolete and are expected to be sold for $400. ii. An item of equipment was disposed of during the year for $1,000. It was purchased in 2016 for $3000. The sale proceeds were credited to the sales account. No other entries relating to the disposal, other than sales proceeds, have been made. AC1025 Principles of accounting page 18 is charged in the year of disposal. iv. At 31 December 2018, the freehold land has been valued at $200,000. The directors wish the valuation of the land to be incorporated into the accounts. v. On 2 January 2019 , a customer who owes $4,000 has gone bankrupt. The company wishes to write this off as a bad debt and provide 5% of the remaining trade reccivables. vi. A page of the purchases day book has been overcast by $500. No adjustments have been made in the relevant ledgers vii. Goods with an original purchase price of $1,500 were retumed to suppliers on 29 December 2018. This has not been recorded. However the inventory has been excluded from the inventory counted on 31 December 2018. vii. The dividend on the cumulative preference shares, due to be paid on I January 2019 , is to be provided and a final dividend on the ordinary shares of $15,000 to be paid on 28 February 2019 has been proposed by the directors. ix. Corporation tax of $20.000 on the current year's profits and audit fee of $5,000 are to be provided. Required: (a) Prepare an income statement for the year ended 31 December 2018, a statement of movements in equity for that year and a statement of financial position at that date, in good style, for the directors. (25 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Internal Auditing A Guide For The New Auditor

Authors: David Galloway

3rd Edition

0894136917, 9780894136917

More Books

Students also viewed these Accounting questions