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Prepare an income statement for the year ended 30 November 2021 and a balance sheet as at 30 November 2021 for Pyramid Ltd.

Prepare an income statement for the year ended 30 November 2021 and a balance sheet as at 30 November 2021 for Pyramid Ltd.

FINANCIAL ACCOUNTING
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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UNIVERSITY 4. Depreciation is charged on a monthly basis. No depreciation for the year ended 30 November 2021 has been entered into the accounting records. On 30 November 2021, Pyramid Ltd. decided to write off a trade receivable of £5,500 and to make an allowance for irrecoverable receivables of 3 per cent of the outstanding receivables at that date. No entries have been made in the nominal ledger accounts. A full year's debenture interest is to be accrued. 5. 6. 7. Energy costs have been paid up to 30 September 2021. The next invoice covering the period 1 October 2021 to 31 December 2021 is expected to be for about £5,200. 8. On 1 July 2021 Pyramid Ltd paid £17,000 for rent to cover the period 1 July 2021 to 31 December 2021. 9. For the financial year ended 30 November 2021, corporation tax is estimated to be £27,800 and the audit fee is estimated to be £8,000. 10. Pyramid Ltd allocates expenses as follows: • depreciation on motor vehicles is allocated to distribution expenses • depreciation on computer equipment is allocated to administration expenses • salary is allocated 80% to administration and 20% to distribution expenses • energy expenses are allocated 70% to administration and 30% to distribution expenses • rent is allocated to administration expenses. Required: Prepare an income statement for the year ended 30 November 2021 and a balance sheet as at 30 November 2021 for Pyramid Ltd.
Transcribed Image Text:UNIVERSITY 4. Depreciation is charged on a monthly basis. No depreciation for the year ended 30 November 2021 has been entered into the accounting records. On 30 November 2021, Pyramid Ltd. decided to write off a trade receivable of £5,500 and to make an allowance for irrecoverable receivables of 3 per cent of the outstanding receivables at that date. No entries have been made in the nominal ledger accounts. A full year's debenture interest is to be accrued. 5. 6. 7. Energy costs have been paid up to 30 September 2021. The next invoice covering the period 1 October 2021 to 31 December 2021 is expected to be for about £5,200. 8. On 1 July 2021 Pyramid Ltd paid £17,000 for rent to cover the period 1 July 2021 to 31 December 2021. 9. For the financial year ended 30 November 2021, corporation tax is estimated to be £27,800 and the audit fee is estimated to be £8,000. 10. Pyramid Ltd allocates expenses as follows: • depreciation on motor vehicles is allocated to distribution expenses • depreciation on computer equipment is allocated to administration expenses • salary is allocated 80% to administration and 20% to distribution expenses • energy expenses are allocated 70% to administration and 30% to distribution expenses • rent is allocated to administration expenses. Required: Prepare an income statement for the year ended 30 November 2021 and a balance sheet as at 30 November 2021 for Pyramid Ltd.
UNIVERSITY 36. The following is the trial balance of Pyramid Ltd as at 30 November 2021. Debit Credit £ Sales 2,465,000 25,000 Other operating income Inventory at 1 December 2020 367,000 Purchases 1,245,000 Administration expenses 198,000 Distribution expenses 75,000 Marketing expenses 298,200 412,000 Salaries 25,500 15,300 405,000 Rent Energy Computer equipment - cost Computer equipment - accumulated depreciation 230,000 Motor vehicles - cost 265,000 Motor vehicles - accumulated depreciation 146,000 26,000 388,000 Non-current investments Receivables Allowance for receivables 13,000 Payables Cash and cash equivalents 252,400 250,200 Ordinary £1 shares Share premium 560,000 26,000 Retained earnings as at 1 December 2020 210,800 5% debentures 76,000 Interim dividend paid 13,000 Suspense account 21,000 Total 4,004,200 4,004,200 The following information is relevant: Closing inventory at 30 November 2021 is £375,000. On further investigation of the suspense account in the trial balance above, it was discovered that a cash payment made on 1 July 2021 of £21,000 posted to the suspense account represents the cost of purchase of computer equipment. Pyramid Ltd depreciates non-current assets as follows: computer equipment at 15 per cent on a straight line basis motor vehicles at 20 per cent on a reducing balance basis. 1. 2. 3.
Transcribed Image Text:UNIVERSITY 36. The following is the trial balance of Pyramid Ltd as at 30 November 2021. Debit Credit £ Sales 2,465,000 25,000 Other operating income Inventory at 1 December 2020 367,000 Purchases 1,245,000 Administration expenses 198,000 Distribution expenses 75,000 Marketing expenses 298,200 412,000 Salaries 25,500 15,300 405,000 Rent Energy Computer equipment - cost Computer equipment - accumulated depreciation 230,000 Motor vehicles - cost 265,000 Motor vehicles - accumulated depreciation 146,000 26,000 388,000 Non-current investments Receivables Allowance for receivables 13,000 Payables Cash and cash equivalents 252,400 250,200 Ordinary £1 shares Share premium 560,000 26,000 Retained earnings as at 1 December 2020 210,800 5% debentures 76,000 Interim dividend paid 13,000 Suspense account 21,000 Total 4,004,200 4,004,200 The following information is relevant: Closing inventory at 30 November 2021 is £375,000. On further investigation of the suspense account in the trial balance above, it was discovered that a cash payment made on 1 July 2021 of £21,000 posted to the suspense account represents the cost of purchase of computer equipment. Pyramid Ltd depreciates non-current assets as follows: computer equipment at 15 per cent on a straight line basis motor vehicles at 20 per cent on a reducing balance basis. 1. 2. 3.
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