A) Prepare a statement of comprehensive income for the year ended 31 December 2019 for ABC.B) Prepare a statement of changes in equity for ABC, for the year ended 31 December 2019. The following information is relevant.1. Closing inventory at 31 December 2019 is £45,0002. On further investigation of the suspense account in the trial balance above, it wasdiscovered that:35.678910An expense of £8,250 for legal services stationery had been posted to the suspenseaccount and a cash receipt of £15,750 had been posted to the suspense account.This represented the disposal proceeds from selling equipment, which had beenpurchased on 1 March 2016 at a cost of £48,000.ABC depreciates non-current assets as follows:buildings at 1 per cent on a straight-line basisplant and equipment at 10 per cent on a straight-line basismotor vehicles at 20 per cent on a reducing balance basis.There are no non-current assets that have a residual value. No depreciation for theyear ended 2018 has been entered into the accounting records. A full year'sdepreciation is charged in the year of acquisition and in the year of disposal.Depreciation expense for the year is included in administration expenses.At 31 December 2019, ABC's directors decided to revalue the buildings to£1,350,000. No entries have been made in the nominal ledger accounts.Post trial balance reconciliations showed that an invoice for £54,000 for insurancefor the period from 1 October 2019 to 30 September 2020 had been paid anddebited to the insurance account. Insurance costs are included in administrationexpenses.A full year's debenture interest is to be accrued.At 31 December 2019, ABC decided to write off a trade receivable of £2,400 and tomake an allowance for irrecoverable receivables of 10 per cent of the outstandingreceivables at that date. No entries have been made in the nominal ledger accounts.No heat and lighting costs for the months of November and December 2019 havebeen recorded in the accounting records. The next quarter's invoice for heat andlighting is expected to be £36,000. Heat and lighting costs are included inadministration expenses.For the financial year ended 31 December 2019, corporation tax is estimated to be£222,000 and the audit fee is estimated to be £180,000.ABC is proposing a final dividend of 2 pence per share. Below is the list of nominal ledger balances of ABC Company at 31 December 2019. ABC'sfinancial year end is at 31 December.Nominal ledger closing balances at 31 December 2019Ordinary shares £18% £0.50 preference shares10% DebenturesRetained earningsInterim ordinary dividend - paidPreference dividends -paidLandBuildingsAccumulated depreciation on buildingsPlant and equipment at costAccumulated depreciation on plant and equipmentMotor vehicles at costAccumulated depreciation on motor vehiclesInventory as at 1 January 2019ReceivablesPayablesBankSalesPurchasesAdministration expensesDistribution costsSuspense account (credit balance)Allowance for receivables£300,000150,00090,000438,1203,0006,000150,0001,200,000120,000540,000216,000345,000124,20052,50048,90057,00028,5003,450,0002,016,000162,000409,9207,5009,000

Name: A) Prepare a statement of comprehensive income for the year ended 31 D
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Description: A) Prepare a statement of comprehensive income for the year ended 31 December 2019 for ABC.B) Prepare a statement of changes in equity for ABC, for the year ended 31 December 2019. The following information is relevant.1. Closing inventory at 31 Dece

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A) Prepare a statement of comprehensive income for the year ended 31 December 2019 for ABC. B) Prepare a statement of changes in equity for ABC, for the year ended 31 December 2019.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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