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
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
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.
Expert Solution
steps

Step by step

Solved in 5 steps with 4 images

Blurred answer
Knowledge Booster
Accounting for Estates and Trusts
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education