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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:

  1. Inventory at 31 December 2023 was valued at £310,000.
  2. At 31 December 2023, £90,000 was owing for office expenses, and £80,000 had been paid in advance for marketing expenses.
  3. A customer had gone into liquidation owing the company £440,000; the company does not expect to recover any of this debt.
  4. 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.
  5. 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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