The following balances were obtained from the books ofThe Hartland Ltd as at December 31, 2015:DETAILSPremises10% MortgageRetained earningsGoodwillDebtorsCreditorsGeneral reservesManagement feesOrdinary shares@ $0.505% Preference shares @ $1Share premiumMotor vehicleProv. for depreciation on motor vehicle10% DebentureMortgage interestDebenture interestCost of salesClosing stockInsuranceWages & salariesInterim ordinary shares dividendBankSalesCommission receivedDR800,00040,000100,000110,00030,00080,0007,0005,000750,00080,00020,00060,0002,0002,084,000CR250,00065,00030,000200,000200,00050,00012,000120,00053,0001.100,0004,0002,084,000Notes:a. Provide for depreciation on motor vehicle at 5% on thereducing balanceb. Insurance is prepaid by $4,000 while wages and salaries isowing by $20,000c. The goodwill should be written down by 25%d. Transfer $25,000 from profits to the general reservese. Corporation tax is estimated at $30,000 f. The following items of expense should be apportioned:AdminSell & Dist.50%30%InsuranceWages & salariesManagement feesDepreciation charges50%70%80%50%20%50%g. Prior to the end of the year the directors approved thefollowing:• preference share dividends is to be accounted for infull• a new issue of 100,000 ordinary shares with par of$0.50 per share; amount collected was $75,000Required:Prepare the following:• Statement of profit and loss• Statement of changes in equity• Statement of financial positionShow appropriate workings and disclosures

Statement of Profit and loss The purpose of preparing the statement of profit and loss account which…

Answered: equired: repare the following: •…

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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