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Question Three The following balances were obtained from the books of Tim Curry plc as at December 31, 2020. Cost of Sales Closing Stock 10% Debenture Debenture Interest General Reserves 5% Loan Loan Interest Retained Earnings Goodwill Ordinary Share Capital @ $2 10% Preference Share Capital @ $1 Share Premium Sales Turnover Debtors Bank Provision for Bad Debts Wages and Salaries Insurance Management Fees Directors Fees Motor Vehicle Provision for Depn on Motor Vehicle Premises Machinery and Equipment Creditors Provision for Depn Mach & Equip Interim Preference Shares Dividends Interim Ordinary Shares Dividend DR 758,500 210,000 20,000 6,000 20,000 200,000 60,000 122,000 47,000 60,000 40,000 500,000 550,000 220,000 CR 350,000 40,000 200,000 400,000 400,000 30,000 1,300,000 8,000 5,000 40,000 33,000 37,500 25,000 5,000 2,843,500 2,843,500

Question Three The following balances were obtained from the books of Tim Curry plc as at December 31, 2020. Cost of Sales Closing Stock 10% Debenture Debenture Interest General Reserves 5% Loan Loan Interest Retained Earnings Goodwill Ordinary Share Capital @ $2 10% Preference Share Capital @ $1 Share Premium Sales Turnover Debtors Bank Provision for Bad Debts Wages and Salaries Insurance Management Fees Directors Fees Motor Vehicle Provision for Depn on Motor Vehicle Premises Machinery and Equipment Creditors Provision for Depn Mach & Equip Interim Preference Shares Dividends Interim Ordinary Shares Dividend DR 758,500 210,000 20,000 6,000 20,000 200,000 60,000 122,000 47,000 60,000 40,000 500,000 550,000 220,000 CR 350,000 40,000 200,000 400,000 400,000 30,000 1,300,000 8,000 5,000 40,000 33,000 37,500 25,000 5,000 2,843,500 2,843,500

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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Question Three The following balances were obtained from the books of Tim Curry plc as at December 31, 2020. Cost of Sales Closing Stock 10% Debenture Debenture Interest General Reserves 5% Loan Loan Interest Retained Earnings Goodwill Ordinary Share Capital @ $2 10% Preference Share Capital @ $1 Share Premium Sales Turnover Debtors Bank Provision for Bad Debts Wages and Salaries Insurance Management Fees Directors Fees Motor Vehicle Provision for Depp on Motor Vehicle Premises Machinery and Equipment Creditors Provision for Depn Mach & Equip Interim Preference Shares Dividends Interim Ordinary Shares Dividend DR 758,500 210,000 20,000 6,000 20,000 200,000 60,000 122,000 47,000 60,000 40,000 500,000 550,000 220,000 25,000 5,000 2,843,500 CR 350,000 40,000 200,000 400,000 400,000 30,000 1,300,000 8,000 5,000 40,000 33,000 37,500 2,843,500
Transcribed Image Text:Question Three The following balances were obtained from the books of Tim Curry plc as at December 31, 2020. Cost of Sales Closing Stock 10% Debenture Debenture Interest General Reserves 5% Loan Loan Interest Retained Earnings Goodwill Ordinary Share Capital @ $2 10% Preference Share Capital @ $1 Share Premium Sales Turnover Debtors Bank Provision for Bad Debts Wages and Salaries Insurance Management Fees Directors Fees Motor Vehicle Provision for Depp on Motor Vehicle Premises Machinery and Equipment Creditors Provision for Depn Mach & Equip Interim Preference Shares Dividends Interim Ordinary Shares Dividend DR 758,500 210,000 20,000 6,000 20,000 200,000 60,000 122,000 47,000 60,000 40,000 500,000 550,000 220,000 25,000 5,000 2,843,500 CR 350,000 40,000 200,000 400,000 400,000 30,000 1,300,000 8,000 5,000 40,000 33,000 37,500 2,843,500
Additional Notes 1. Wages and salaries owing by 8,000; Insurance is prepaid by 7,000 2. Provide for depreciation as follows Motor Vehicle Machinery and Equipment 10% RB 5% SL 3. Goodwill is to be amortized by 15% 4. Corporation tax is estimated to be 42,000 5. The provision for bad debts is to be revised to 10% of debtors. The adjustment is to be treated as administrative expenses 6. Transfer 20,000 from profits to the general reserves 7. The operating expenses are to be apportioned as follows Wages and Salaries Insurance Management Fees Directors Fees Depreciation Selling Admin & Dist 60% 50% 50% 70% 40% 40% 50% 50% 30% 60% 8. The following proposals were approved by the directors a. Final ordinary shares premium @ 5% b. New issue of 50,000 Ordinary shares for a total value of 110,000 Required 1. State three factors that may influence a company's decision to pay dividends 2. Briefly explain three non cash dividend options 3. Prepare the following a. The Statement of Profit and Loss b. The Statement of Change in Equity c. The Statement of Financial Position
Transcribed Image Text:Additional Notes 1. Wages and salaries owing by 8,000; Insurance is prepaid by 7,000 2. Provide for depreciation as follows Motor Vehicle Machinery and Equipment 10% RB 5% SL 3. Goodwill is to be amortized by 15% 4. Corporation tax is estimated to be 42,000 5. The provision for bad debts is to be revised to 10% of debtors. The adjustment is to be treated as administrative expenses 6. Transfer 20,000 from profits to the general reserves 7. The operating expenses are to be apportioned as follows Wages and Salaries Insurance Management Fees Directors Fees Depreciation Selling Admin & Dist 60% 50% 50% 70% 40% 40% 50% 50% 30% 60% 8. The following proposals were approved by the directors a. Final ordinary shares premium @ 5% b. New issue of 50,000 Ordinary shares for a total value of 110,000 Required 1. State three factors that may influence a company's decision to pay dividends 2. Briefly explain three non cash dividend options 3. Prepare the following a. The Statement of Profit and Loss b. The Statement of Change in Equity c. The Statement of Financial Position
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