Dr Cr $000 $000 Ordinary share capital (500,000 shares) 1,000 Foreign currency translation reserve 26 Investment property 120 Retained earnings 1 January 2021 269 Inventory (raw materials) at 1 January 2021 20 Sales 1297 Purchases 349 Purchases returns 5 Sales returns 4 Carriage outwards 9 Work-in-progress at 1 January 2021 35 Intangible assets 342 Administrative wages 28 Machine – cost 259 Accumulated depreciation (machine) – 1 January 2021 80 Delivery vehicle hire 35 Distribution expenses 22 Administrative expenses 34 Directors’ salaries 92 Sales allowances 2 Accounts payable 494 Bank overdraft 3 Accounts receivable 381 Cash at bank 140 Land 303 2175 2175 During the year to 31 December 2021, assets with a carrying amount of $3,790 were sold at a loss of $5,850. No entries have yet been made to record this. Depreciation charges for the year should be calculated at 10% on cost. A fire at the factory on 31 December 2021 damaged the machine, leaving it with a lower operating capacity. The accountant considers that Beta will need to recognise an impairment loss in relation to this damage. An equivalent new machine would cost $70,000. The machine could be sold in its current condition for a gross amount of $45,000. Dismantling costs would amount to $2,000. In its current condition, the machine could operate for three more years which gives it a value in use figure of $38,685. Inventories (raw materials) at 1 January 2022 were valued at $2,000, work-in-progress at 1 January 2022 was valued at $5,000 The income tax for the year is evaluated as $2,000 Beta works as an agent for a number of smaller contractors, earning commission of 10%. Beta’s revenue includes $6,000 received from clients under these agreements with $5,400 in cost of sales representing the amount paid to the contractors. Receivables totalling $14,000 are to be written off Intangible assets are to be amortized at 10% on cost Allowance for receivables should be created as 0,1% of net sales On 7 November 2021 there was a fire in the warehouse, in which inventory valued at $12,000 was destroyed. Under the terms of the insurance contract, the insurance company has stated that it will only pay out the first $3,000 of the claim. No entries have yet been made to record this. Dividends $0.05/share were accrued at 31 December 2021. Prepare a statement of profit or loss and other comprehensive income for the year ended 31 December 2021,
|
Dr |
Cr |
|
$000 |
$000 |
Ordinary share capital (500,000 shares) |
|
1,000 |
Foreign currency translation reserve |
|
26 |
Investment property |
120 |
|
|
|
269 |
Inventory (raw materials) at 1 January 2021 |
20 |
|
Sales |
|
1297 |
Purchases |
349 |
|
Purchases returns |
|
5 |
Sales returns |
4 |
|
Carriage outwards |
9 |
|
Work-in-progress at 1 January 2021 |
35 |
|
Intangible assets |
342 |
|
Administrative wages |
28 |
|
Machine – cost |
259 |
|
|
|
80 |
Delivery vehicle hire |
35 |
|
Distribution expenses |
22 |
|
Administrative expenses |
34 |
|
Directors’ salaries |
92 |
|
Sales allowances |
2 |
|
Accounts payable |
|
494 |
Bank overdraft |
|
3 |
Accounts receivable |
381 |
|
Cash at bank |
140 |
|
Land |
303 |
|
|
2175 |
2175 |
- During the year to 31 December 2021, assets with a carrying amount of $3,790 were sold at a loss of $5,850. No entries have yet been made to record this. Depreciation charges for the year should be calculated at 10% on cost.
- A fire at the factory on 31 December 2021 damaged the machine, leaving it with a lower operating capacity. The accountant considers that Beta will need to recognise an impairment loss in relation to this damage. An equivalent new machine would cost $70,000. The machine could be sold in its current condition for a gross amount of $45,000. Dismantling costs would amount to $2,000. In its current condition, the machine could operate for three more years which gives it a value in use figure of $38,685.
- Inventories (raw materials) at 1 January 2022 were valued at $2,000, work-in-progress at 1 January 2022 was valued at $5,000
- The income tax for the year is evaluated as $2,000
- Beta works as an agent for a number of smaller contractors, earning commission of 10%. Beta’s revenue includes $6,000 received from clients under these agreements with $5,400 in cost of sales representing the amount paid to the contractors.
- Receivables totalling $14,000 are to be written off
- Intangible assets are to be amortized at 10% on cost
- Allowance for receivables should be created as 0,1% of net sales
- On 7 November 2021 there was a fire in the warehouse, in which inventory valued at $12,000 was destroyed. Under the terms of the insurance contract, the insurance company has stated that it will only pay out the first $3,000 of the claim. No entries have yet been made to record this.
- Dividends $0.05/share were accrued at 31 December 2021.
Prepare a statement of profit or loss and other comprehensive income for the year ended 31 December 2021,
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