Marconi Ltd are special wholesalers. Below is their trial balance as at 31st December, 2014DR CCR COrdinary Share capital: C1 share1,000,000Share premium120,000General reserve48,000Retained profit as at 31st December 2013139,750Inventory – 31/12/2013336,720Revenue5,090,370Purchases2,475,910Returns outwards121,220Returns inwards136,200Carriage inwards6,340Carriage outwards43,790Warehouse wages410,240Sales people's salaries305,110Administrative wages and salaries277,190Plant and machinery610,000Motor vehicle hired84,770Provisions for depreciation: Plant and machinery216,290General distribution expenses27,130General administrative expenses47,990Directors' remuneration195,140Ordinary dividend375,000Rents receivable37,150Trade accounts receivable1,623,570Cash at bank and in hand179,250Trade accounts payable304,570Bills of exchange payable57,0007,134,3507,134,350Additional information:i. inventory at 31/12/2014 was C412,780, consists of goods for resaleii. Plant and machinery is apportioned: distributive 60% and administrative 40%iii. Accrued auditor's remuneration amounted to C71,000iv. Depreciate plant and machinery – 20% on costv. Of the motor hired, C55,000 is for distributive purposesvi. Corporate tax on profits, at a rate of 25%, is estimated at C238,500 and is payable on 1/10/2015vii. Pension contributions for staff amounted to C42,550 and social security contributions to C80,120.These figures are included in wages and salaries in the trial balance.viii. Plant of C75,000 had been bought during the year. This amount is included in the trial balance.ix. Directors remuneration has been as follows:Chairman46,640Managing Director51,500Finance Director46,000Marketing Director43,000187,140In addition, each of them drew C2,000 as directors' fees. Pensions are the personal responsibility of directors.Required:Subject to the limits of the information given, draw up an income statement for the year ending 31st December2014 and a statement of financial position as at that date. Add the necessary notes prescribed by statute.

Financial Statements: Financial statements are considered as a summary of the events that took place…

addition, each of them drew C2,000 as directors' fees. Pensions are the personal responsibility of directors. equired: ubject to the limits of the information given, draw up an income statement for the year ending 31st December 014 and a statement of financial position as at that date. Add the necessary notes prescribed by statute.

addition, each of them drew C2,000 as directors' fees. Pensions are the personal responsibility of directors. equired: ubject to the limits of the information given, draw up an income statement for the year ending 31st December 014 and a statement of financial position as at that date. Add the necessary notes prescribed by statute.

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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