Question One The following trial balance relates to Succeed Limited as at 30 June 2020 K K 88,000 K1 ordinary shares – issued 88,000 44,000 8% K1 preference shares 44,000 Share premium account 11,000 Revaluation reserve - PPE 33,000 Sales 220,000 Purchases 135,300 Opening inventory 87,279 Trade receivables and prepayments 29,920 Trade payables and accruals 15,094 Bank balance 4,726 10% Loan stock 17,600 General reserve 30,800 Bad debts 374 Wages and salaries 31,020 Installment tax paid 3,850 Insurance 1,551 Dividend paid - Preference 3,520 Dividend paid - Ordinary 2,420 Postage and telephone 682 Light and heat 1,338 Loan stock interest (½ year to 31 December 2019) 880 Directors’ fees 2,750 General expenses 3,419 Vehicles (cost K21,340) 7,480 Office furniture and equipment (cost K49,104) 30,184 Land and buildings at valuation 145,420 Retained earnings at 1 July 2019 32,618 492,111 492,111 The following information is also available: Closing Inventory was given as K92, 237 The land and buildings are to be revalued at K165,000 Office furniture and equipment is to be depreciated at 15% on cost, and vehicles at 20% on cost A bill for K348 in respect of electricity consumed up to 30 June 2020 has not been entered in the ledger, The amount for insurance includes a premium of K330 paid in December 2019 to cover the company against fire loss for the year 31 December 2019 to 31 December 2020. Provisions are to be made for: Directors’ fees K5,500 Audit fees K1,320 The total tax expense for the year is estimated at K8,250. 8.K13, 200 should be transferred to the general reserve. Required Prepare a statement of profit or loss for the year ended 30 June 2020 and a statement of financial position as at the same date.

Question One The following trial balance relates to Succeed Limited as at 30 June 2020 K K 88,000 K1 ordinary shares – issued 88,000 44,000 8% K1 preference shares 44,000 Share premium account 11,000 Revaluation reserve - PPE 33,000 Sales 220,000 Purchases 135,300 Opening inventory 87,279 Trade receivables and prepayments 29,920 Trade payables and accruals 15,094 Bank balance 4,726 10% Loan stock 17,600 General reserve 30,800 Bad debts 374 Wages and salaries 31,020 Installment tax paid 3,850 Insurance 1,551 Dividend paid - Preference 3,520 Dividend paid - Ordinary 2,420 Postage and telephone 682 Light and heat 1,338 Loan stock interest (½ year to 31 December 2019) 880 Directors’ fees 2,750 General expenses 3,419 Vehicles (cost K21,340) 7,480 Office furniture and equipment (cost K49,104) 30,184 Land and buildings at valuation 145,420 Retained earnings at 1 July 2019 32,618 492,111 492,111 The following information is also available: Closing Inventory was given as K92, 237 The land and buildings are to be revalued at K165,000 Office furniture and equipment is to be depreciated at 15% on cost, and vehicles at 20% on cost A bill for K348 in respect of electricity consumed up to 30 June 2020 has not been entered in the ledger, The amount for insurance includes a premium of K330 paid in December 2019 to cover the company against fire loss for the year 31 December 2019 to 31 December 2020. Provisions are to be made for: Directors’ fees K5,500 Audit fees K1,320 The total tax expense for the year is estimated at K8,250. 8.K13, 200 should be transferred to the general reserve. Required Prepare a statement of profit or loss for the year ended 30 June 2020 and a statement of financial position as at the same date.

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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Question One

The following trial balance relates to Succeed Limited as at 30 June 2020

	K	K
88,000 K1 ordinary shares – issued		88,000
44,000 8% K1 preference shares		44,000
Share premium account		11,000
Revaluation reserve - PPE		33,000
Sales		220,000
Purchases	135,300
Opening inventory	87,279
Trade receivables and prepayments	29,920
Trade payables and accruals		15,094
Bank balance	4,726
10% Loan stock		17,600
General reserve		30,800
Bad debts	374
Wages and salaries	31,020
Installment tax paid	3,850
Insurance	1,551
Dividend paid - Preference	3,520
Dividend paid - Ordinary	2,420
Postage and telephone	682
Light and heat	1,338
Loan stock interest (½ year to 31 December 2019)	880
Directors’ fees	2,750
General expenses	3,419
Vehicles (cost K21,340)	7,480
Office furniture and equipment (cost K49,104)	30,184
Land and buildings at valuation	145,420
Retained earnings at 1 July 2019		32,618
	492,111	492,111

The following information is also available:

Closing Inventory was given as K92, 237
The land and buildings are to be revalued at K165,000
Office furniture and equipment is to be depreciated at 15% on cost, and vehicles at 20% on cost
A bill for K348 in respect of electricity consumed up to 30 June 2020 has not been entered in the ledger,
The amount for insurance includes a premium of K330 paid in December 2019 to cover the company against fire loss for the year 31 December 2019 to 31 December 2020.
Provisions are to be made for:

Directors’ fees K5,500

Audit fees K1,320

The total tax expense for the year is estimated at K8,250.

8.K13, 200 should be transferred to the general reserve.

Required

Prepare a statement of profit or loss for the year ended 30 June 2020 and a statement of financial position as at the same date.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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