Question 2 continued (last part) (2) Share capital The increase in the share capital during the year is due to the following events: (i) On 1 April 2019, there was a bonus issue (out of the revaluation reserve) of one bonus share for every 10 shares held. (ii) The convertible loans were converted at a rate of 50 shares for every £100 of the loan. (iii) The remaining increase in the ordinary share capital was due to the issue of shares for cash on 1 March 2020. (3) Retained earnings 31 March 2020 31 March 2019 £000 £000 Opening balance 4,100 4,500 Profit for the year 2,300 1,500 Dividends (5,300) (1,900) 1,100 4,100 (4) Trade receivables Trade receivables on 31 March 2020 include £10,000 relating to the sale of the plant. (5) Amortisation of government grants Government grants of £300,000 were credited to cost of sales during the year ended 31 March 2020. Required: (a) Prepare a Statement of Cash Flows for Marado for the year ended 31 March 2020 in accordance with IAS 7, Statement of Cash Flows. (b) Discuss the main issues revealed by Marado’s Statement of Cash Flows for the year ended 31 March 2020.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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