Prepare the company’s Statement of Profit or Loss for the year ended 31 March 20X3, in a form suitable for publication, together with its Statement of Financial Position as at that date.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Prepare the company’s Statement of Profit or Loss for the year ended 31 March 20X3, in a form suitable for publication, together with its Statement of Financial Position as at that date. Support your response with full workings.

5. C.L.Worcester Ltd provides office supplies to businesses throughout the UK. Preparation of
its financial statements for the year ended 31 March 20X3 is now underway and the trial
balance is shown below. All figures in the trial balance and in the additional information
supplied beneath it are in £'000s.
DR
CR
£'000s
£'000s
Carriage inwards
1,190
Returns inwards & outwards
230
395
Selling & distribution salaries
33,500
Administration salaries
10,120
Directors' remuneration
4,500
Purchases
45,500
Sales
122,275
Rents & utilities (power & water)
9,200
Insurance
800
Running & repair of distribution vehicles
1,200
Advertising
Professional fees
Loan interest
Discounts allowed
2,200
1,700
200
290
Inventory
14,800
Trade receivables
12,500
Trade payables
20,600
Allowance for irrecoverable receivables as at 1 April X2
200
Bank/cash
1,180
Share capital account
3,600
Share premium account
1,400
Retained earnings reserve
8,140
Bank loan (repayable in 20X8)
Interim dividend paid
Distribution vehicles: Cost as at 1 April X2
2,900
500
19,300
Accumulated depreciation provision as at 1 April X2
Fixtures & fittings: Cost as at 1 April X2
Accumulated depreciation provision as at 1 April X2
5,400
15,000
9,000
173,910
173,910
Transcribed Image Text:5. C.L.Worcester Ltd provides office supplies to businesses throughout the UK. Preparation of its financial statements for the year ended 31 March 20X3 is now underway and the trial balance is shown below. All figures in the trial balance and in the additional information supplied beneath it are in £'000s. DR CR £'000s £'000s Carriage inwards 1,190 Returns inwards & outwards 230 395 Selling & distribution salaries 33,500 Administration salaries 10,120 Directors' remuneration 4,500 Purchases 45,500 Sales 122,275 Rents & utilities (power & water) 9,200 Insurance 800 Running & repair of distribution vehicles 1,200 Advertising Professional fees Loan interest Discounts allowed 2,200 1,700 200 290 Inventory 14,800 Trade receivables 12,500 Trade payables 20,600 Allowance for irrecoverable receivables as at 1 April X2 200 Bank/cash 1,180 Share capital account 3,600 Share premium account 1,400 Retained earnings reserve 8,140 Bank loan (repayable in 20X8) Interim dividend paid Distribution vehicles: Cost as at 1 April X2 2,900 500 19,300 Accumulated depreciation provision as at 1 April X2 Fixtures & fittings: Cost as at 1 April X2 Accumulated depreciation provision as at 1 April X2 5,400 15,000 9,000 173,910 173,910
Additional information is as follows:
• Depreciation is charged on distribution vehicles on a 25% reducing balance basis.
• It is assumed that fixtures and fittings, which are depreciated on a straight-line basis
over five years, will have no residual value on disposal. Their depreciation is treated
as an administration cost.
An accrual of £1,300 is required for power consumed in February and March 20X3
but not billed by the year-end. Rent and utility costs are split equally between the
selling and distribution department and the administration department.
Insurance is treated as an administration cost. Included within the trial balance figure
is a premium for public liability insurance of £375 which relates to cover for the
period 1 August X2 to 31 July X3.
• An accrual of £500 should be made for auditors' and consultancy fees.
The company's policy is to make an allowance for irrecoverable receivables at a rate
of 3% of the year-end trade receivables balance. Movements on this allowance are
classified as relating to administration.
Inventory as at 31 March 20X3 was valued at £15,400.
• Provision should be made for taxation at a rate of 20% of the profit after finance
costs.
Required:
i. Prepare the company's Statement of Profit or Loss for the year ended 31 March 20X3, in a
form suitable for publication, together with its Statement of Financial Position as at that date.
Support your response with full workings.
Transcribed Image Text:Additional information is as follows: • Depreciation is charged on distribution vehicles on a 25% reducing balance basis. • It is assumed that fixtures and fittings, which are depreciated on a straight-line basis over five years, will have no residual value on disposal. Their depreciation is treated as an administration cost. An accrual of £1,300 is required for power consumed in February and March 20X3 but not billed by the year-end. Rent and utility costs are split equally between the selling and distribution department and the administration department. Insurance is treated as an administration cost. Included within the trial balance figure is a premium for public liability insurance of £375 which relates to cover for the period 1 August X2 to 31 July X3. • An accrual of £500 should be made for auditors' and consultancy fees. The company's policy is to make an allowance for irrecoverable receivables at a rate of 3% of the year-end trade receivables balance. Movements on this allowance are classified as relating to administration. Inventory as at 31 March 20X3 was valued at £15,400. • Provision should be made for taxation at a rate of 20% of the profit after finance costs. Required: i. Prepare the company's Statement of Profit or Loss for the year ended 31 March 20X3, in a form suitable for publication, together with its Statement of Financial Position as at that date. Support your response with full workings.
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