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The balances below have been extracted from the accounting records of Moscow Ltd at 31 Decembe Bank account Retained profits at 1 January 2021 Freehold land Buildings: cost Buildings: accumulated depreciation at 1 January 2021 Plant & machinery: cost Plant & machinery: accumulated depreciation at 1 January 2021 Trade payables Dr £ 238,000 2,000,000 8,000,000 3,750,000 Cr £ 2,123,000 2,000,000 2,340,000 520,000

The balances below have been extracted from the accounting records of Moscow Ltd at 31 Decembe Bank account Retained profits at 1 January 2021 Freehold land Buildings: cost Buildings: accumulated depreciation at 1 January 2021 Plant & machinery: cost Plant & machinery: accumulated depreciation at 1 January 2021 Trade payables Dr £ 238,000 2,000,000 8,000,000 3,750,000 Cr £ 2,123,000 2,000,000 2,340,000 520,000

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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The figure for prepayments at 1 January 2021 in the trial balance is in respect of two months’ insurance paid in advance. On 1 November 2021, the company paid insurance premium for its bui £300,000 for six months, in advance. This amount was included in administrative expenses. 6. 7. Any unpaid interest on debentures has yet to be accrued for. Required: Prepare an income statement for Moscow Ltd for the year ended 31st December 20?1 and a statement of position at 31 December 2021 for the directors. eS Decal
Transcribed Image Text:The figure for prepayments at 1 January 2021 in the trial balance is in respect of two months’ insurance paid in advance. On 1 November 2021, the company paid insurance premium for its bui £300,000 for six months, in advance. This amount was included in administrative expenses. 6. 7. Any unpaid interest on debentures has yet to be accrued for. Required: Prepare an income statement for Moscow Ltd for the year ended 31st December 20?1 and a statement of position at 31 December 2021 for the directors. eS Decal
The balances below have been extracted from the accounting records of Moscow Ltd at 31 Decembe Dr Cr £ £ Bank account 238,000 Retained profits at 1 January 2021 2,123,000 Freehold land 2,000,000 Buildings: cost Buildings: accumulated depreciation at 1 January 2021 Plant & machinery: cost Plant & machinery: accumulated depreciation at 1 January 2021 Trade payables 8,000,000 2,000,000 3,750,000 2,340,000 520,000 Trade receivables 450,000 Return outwards 38,000 Inventory at 1 January 2021 267,000 Revenue 5,006,000 Purchases 3,200,000 8% Debenture loan: repayable in 2026 2,000,000 Debenture interest 80,000 Return inwards 66,000 Distribution costs 382,000 Administrative expenses Prepayment on building insurance at 1 January 2021 Ordinary share capital 514,000 80,000 5,000,000 19,027,000 19,027,000 You are given the following information: Inventory at 31 December 2021 cost £300,000. This includes some slow-moving items which c which would normally sell for £22,000 but which the directors have decided to sell at £15,000 to cle: 1. 2. The land was purchased in 2016 for £2,000,000. It was externally valued for the com professional appraiser at £4,000,000 on 31 December 2021. 3. In December 2021, the company sold a piece of machinery for £10,000. The machinery whic had been purchased in 2019 for £30,000. Neither the sale nor the proceeds of sale have been accounte accounting records of the company. 4. The company's depreciation policy is to provide a full year's depreciation in the year of асq no depreciation in the year of disposal with the following rates applicable to the non-current assets: Freehold land – no depreciation required. а. b. Buildings – 2% per year on a straight-line basis. с. Plant and machinery – 10% on a reducing balance method. 5. A bad debt of £20,000 is to be written off.
Transcribed Image Text:The balances below have been extracted from the accounting records of Moscow Ltd at 31 Decembe Dr Cr £ £ Bank account 238,000 Retained profits at 1 January 2021 2,123,000 Freehold land 2,000,000 Buildings: cost Buildings: accumulated depreciation at 1 January 2021 Plant & machinery: cost Plant & machinery: accumulated depreciation at 1 January 2021 Trade payables 8,000,000 2,000,000 3,750,000 2,340,000 520,000 Trade receivables 450,000 Return outwards 38,000 Inventory at 1 January 2021 267,000 Revenue 5,006,000 Purchases 3,200,000 8% Debenture loan: repayable in 2026 2,000,000 Debenture interest 80,000 Return inwards 66,000 Distribution costs 382,000 Administrative expenses Prepayment on building insurance at 1 January 2021 Ordinary share capital 514,000 80,000 5,000,000 19,027,000 19,027,000 You are given the following information: Inventory at 31 December 2021 cost £300,000. This includes some slow-moving items which c which would normally sell for £22,000 but which the directors have decided to sell at £15,000 to cle: 1. 2. The land was purchased in 2016 for £2,000,000. It was externally valued for the com professional appraiser at £4,000,000 on 31 December 2021. 3. In December 2021, the company sold a piece of machinery for £10,000. The machinery whic had been purchased in 2019 for £30,000. Neither the sale nor the proceeds of sale have been accounte accounting records of the company. 4. The company's depreciation policy is to provide a full year's depreciation in the year of асq no depreciation in the year of disposal with the following rates applicable to the non-current assets: Freehold land – no depreciation required. а. b. Buildings – 2% per year on a straight-line basis. с. Plant and machinery – 10% on a reducing balance method. 5. A bad debt of £20,000 is to be written off.
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