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Required: Prepare the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of financial position for the year ended 31 December 2022. Note: Show all workings.

Required: Prepare the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of financial position for the year ended 31 December 2022. Note: Show all workings.

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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Required:

Prepare the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of financial position for the year ended 31 December 2022.

 

Note: Show all workings.

 

The following trial balance has been extracted from the books of Middle East Drone Company Ltd. on 31 December 2022 Credit Administration expenses Distribution expenses Share Capital Share premium Revaluation surplus Dividend paid Cash in hand Cash at bank Receivables Interest paid Dividends received Interest received Land and buildings at cost (land $760,000, buildings $200,00) Land and buildings: accumulated depreciation Plant and machinery Plant and machinery: accumulated depreciation Retained earnings (as on 1 January 2022) Purchases Sales Inventory as on 1 January 2022 Trade payables Bank loan Debit $ 625,000 $ 737,500 67,500 1,250 6,250 582,500 62,500 1,200,000 1,000,000 3,150,000 350,000 675,000 200,000 50,000 37,500 2,500 75,000 5,412,500 67,500 250,000 $ 7,782,500 $ 7,782,500 3), Land is to be revalued upwards by $200,000 4). Income tax of $330,000 is to be provided for the year to 31 December 2022. 5. The bank loan is repayable in 6 years' time. 6.The directors declared a final dividend of $337.500. 425,000 587,500 Additional information: 1). Inventory on 31 December 2022 was valued at cost of $237,500. Included in this balance were goods that cost $37,500. These goods had become damaged during the year, and it is considered that the goods could be sold for $12,500 after paying commission of $1,250. 2). Depreciation for the year to 31 December 2022 is to be charged against cost of sales as follows. Buildings 5% on cost (straight line). Plant and machinery 30% on carrying amount (reducing balance)
Transcribed Image Text:The following trial balance has been extracted from the books of Middle East Drone Company Ltd. on 31 December 2022 Credit Administration expenses Distribution expenses Share Capital Share premium Revaluation surplus Dividend paid Cash in hand Cash at bank Receivables Interest paid Dividends received Interest received Land and buildings at cost (land $760,000, buildings $200,00) Land and buildings: accumulated depreciation Plant and machinery Plant and machinery: accumulated depreciation Retained earnings (as on 1 January 2022) Purchases Sales Inventory as on 1 January 2022 Trade payables Bank loan Debit $ 625,000 $ 737,500 67,500 1,250 6,250 582,500 62,500 1,200,000 1,000,000 3,150,000 350,000 675,000 200,000 50,000 37,500 2,500 75,000 5,412,500 67,500 250,000 $ 7,782,500 $ 7,782,500 3), Land is to be revalued upwards by $200,000 4). Income tax of $330,000 is to be provided for the year to 31 December 2022. 5. The bank loan is repayable in 6 years' time. 6.The directors declared a final dividend of $337.500. 425,000 587,500 Additional information: 1). Inventory on 31 December 2022 was valued at cost of $237,500. Included in this balance were goods that cost $37,500. These goods had become damaged during the year, and it is considered that the goods could be sold for $12,500 after paying commission of $1,250. 2). Depreciation for the year to 31 December 2022 is to be charged against cost of sales as follows. Buildings 5% on cost (straight line). Plant and machinery 30% on carrying amount (reducing balance)
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