Question
Xi Ltd Date: 31 December 2023 Trial Balance: Description Dr (000) Cr (000) Bank overdraft 95 Called-up share capital (ordinary shares of 1 each)
Xi Ltd
Date: 31 December 2023
Trial Balance:
Description | Dr (£000) | Cr (£000) |
Bank overdraft | 95 | |
Called-up share capital (ordinary shares of £1 each) | 2,800 | |
Accounts payable | 125 | |
Accounts receivable | 105 | |
Non-current assets: at cost | 450 | |
Accumulated depreciation (at 1 January 2023) | 270 | |
Marketing expenses | 250 | |
Office expenses | 280 | |
Retained profits (at 1 January 2023) | 350 | |
Production expenses | 3,700 | |
Purchases (net of VAT) | 5,100 | |
Sales (amounts invoiced, net of VAT) | 10,200 | |
Inventory (at 1 January 2023) | 270 | |
Trade accounts payable | 300 | |
Trade accounts receivable | 3,800 | |
Total | 10,350 | 10,350 |
Additional Information:
- Inventory at 31 December 2023 was valued at £310,000.
- At 31 December 2023, £90,000 was owing for office expenses, and £80,000 had been paid in advance for marketing expenses.
- A customer had gone into liquidation owing the company £440,000; the company does not expect to recover any of this debt.
- The company decides to set up an allowance for doubtful debts amounting to 5% of the outstanding trade accounts receivable as at the end of each financial year.
- Depreciation is to be charged on the non-current assets at a rate of 20% on cost; it is to be apportioned as follows:
- Marketing: 30%
- Office: 20%
- Production: 50%
Note:
There were no acquisitions or disposals of non-current assets during the year to 31 December 2023.
Required:
Prepare Xi Ltd’s income statement for the year ending 31 December 2023, and a balance sheet as at that date.
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