equired: repare the following: • Statement of profit and loss o Statement of changes in equity • Statement of financial position how appropriate workings and disclosures

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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The following balances were obtained from the books of
The Hartland Ltd as at December 31, 2015:
DETAILS
Premises
10% Mortgage
Retained earnings
Goodwill
Debtors
Creditors
General reserves
Management fees
Ordinary shares@ $0.50
5% Preference shares @ $1
Share premium
Motor vehicle
Prov. for depreciation on motor vehicle
10% Debenture
Mortgage interest
Debenture interest
Cost of sales
Closing stock
Insurance
Wages & salaries
Interim ordinary shares dividend
Bank
Sales
Commission received
DR
800,000
40,000
100,000
110,000
30,000
80,000
7,000
5,000
750,000
80,000
20,000
60,000
2,000
2,084,000
CR
250,000
65,000
30,000
200,000
200,000
50,000
12,000
120,000
53,000
1.100,000
4,000
2,084,000
Notes:
a. Provide for depreciation on motor vehicle at 5% on the
reducing balance
b. Insurance is prepaid by $4,000 while wages and salaries is
owing by $20,000
c. The goodwill should be written down by 25%
d. Transfer $25,000 from profits to the general reserves
e. Corporation tax is estimated at $30,000
Transcribed Image Text:The following balances were obtained from the books of The Hartland Ltd as at December 31, 2015: DETAILS Premises 10% Mortgage Retained earnings Goodwill Debtors Creditors General reserves Management fees Ordinary shares@ $0.50 5% Preference shares @ $1 Share premium Motor vehicle Prov. for depreciation on motor vehicle 10% Debenture Mortgage interest Debenture interest Cost of sales Closing stock Insurance Wages & salaries Interim ordinary shares dividend Bank Sales Commission received DR 800,000 40,000 100,000 110,000 30,000 80,000 7,000 5,000 750,000 80,000 20,000 60,000 2,000 2,084,000 CR 250,000 65,000 30,000 200,000 200,000 50,000 12,000 120,000 53,000 1.100,000 4,000 2,084,000 Notes: a. Provide for depreciation on motor vehicle at 5% on the reducing balance b. Insurance is prepaid by $4,000 while wages and salaries is owing by $20,000 c. The goodwill should be written down by 25% d. Transfer $25,000 from profits to the general reserves e. Corporation tax is estimated at $30,000
f. The following items of expense should be apportioned:
Admin
Sell & Dist.
50%
30%
Insurance
Wages & salaries
Management fees
Depreciation charges
50%
70%
80%
50%
20%
50%
g. Prior to the end of the year the directors approved the
following:
• preference share dividends is to be accounted for in
full
• a new issue of 100,000 ordinary shares with par of
$0.50 per share; amount collected was $75,000
Required:
Prepare the following:
• Statement of profit and loss
• Statement of changes in equity
• Statement of financial position
Show appropriate workings and disclosures
Transcribed Image Text:f. The following items of expense should be apportioned: Admin Sell & Dist. 50% 30% Insurance Wages & salaries Management fees Depreciation charges 50% 70% 80% 50% 20% 50% g. Prior to the end of the year the directors approved the following: • preference share dividends is to be accounted for in full • a new issue of 100,000 ordinary shares with par of $0.50 per share; amount collected was $75,000 Required: Prepare the following: • Statement of profit and loss • Statement of changes in equity • Statement of financial position Show appropriate workings and disclosures
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