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Understanding and preparing financial statements for single-entity limited companies. The following is the trial balance of Minxiama Ltd at 31 December 2022. Minxiama Ltd
Understanding and preparing financial statements for single-entity limited companies.
The following is the trial balance of Minxiama Ltd at 31 December 2022.
Minxiama Ltd | ||||
---|---|---|---|---|
Trial balance at 31 December 2022 | ||||
Sales | 3,790,000 | |||
Other operating income | 125,000 | |||
Inventory at 1 January 2022 | 834,000 | |||
Purchases | 1,099,500 | |||
Administrative expenses | 396,000 | |||
Distribution costs | 225,000 | |||
Salaries | 715,500 | |||
Insurance expenses | 46,000 | |||
Marketing expenses | 410,000 | |||
Energy costs | 24,000 | |||
Equipment - cost | 900,000 | |||
Equipment - accumulated depreciation | 270,000 | |||
Vehicles - cost | 400,000 | |||
Vehicles - accumulated depreciation | 80,000 | |||
Non-current investments | 57,000 | |||
Receivables | 820,000 | |||
Allowance for receivables | 30,000 | |||
Payables | 565,000 | |||
Bank | 497,000 | |||
Ordinary shares (nominal value 1) | 880,000 | |||
Ordinary share premium | 110,000 | |||
Retained earnings at 1 January 2022 | 285,000 | |||
5% debentures | 300,000 | |||
Interim ordinary dividend paid | 11,000 | |||
Total | Total6,435,000 | Total6,435,000 |
The following information is relevant:
- Closing inventory at 31 December 2022 is 625,000.
- Minxiama Ltd depreciates non-current assets as follows:
- Equipment at 15% per annum on a straight line basis
- Vehicles at 20% per annum on a reducing balance basis.
- On 31December 2022, Minxiama Ltd decided to write off receivables of 22,000 and to make an allowance for irrecoverable receivables of 3% of net receivables at that date. No entries have been made in the accounting records.
- A full year's interest on the debentures is to be accrued.
- Energy costs have been paid up to 31October 2022. The next invoice covering the period 1November2022 to 31January 2023 is expected to be 8,400.
- On 1August 2022, Minxiama Ltd had paid 34,000 for insurance to cover the period 1August 2022 to 31January 2023
- For the financial year ended 31 December 2022, the audit fee is estimated to be 32,000 and corporation tax is estimated to be 135,750.
- Minxiama Ltd allocates expenses as follows:
- Depreciation on vehicles is to be allocated to distribution costs.
- Depreciation on equipment is to be allocated to administrative expenses.
- Salaries and energy expenses are to be allocated 80% to administrative expenses and 20% to distribution costs.
- All other expenses are to be allocated to administrative expenses.
Required
- b.Make a statement of changes in equity for Minxiama Ltd for the year ended 31 December 2022. clearly show all your workings.
- c.Make a statement of financial position for Minxiama Ltd as at 31 December 2022. clearly show all your workings.
- d. Using the numbers from Minxiama Ltd to illustrate, explain the purposes of the statement of changes in equity.
Step by Step Solution
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Step: 1
b Statement of Changes in Equity for Minxiama Ltd for the year ended 31 December 2022 Ordinary Shares Ordinary Share Premium Retained Earnings Total Equity Balance at 1 January 2022 880000 110000 2850...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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