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 ofposition at 31 December 2021 for the directors.eS Decal The balances below have been extracted from the accounting records of Moscow Ltd at 31 DecembeDrCr££Bank account238,000Retained profits at 1 January 20212,123,000Freehold land2,000,000Buildings: costBuildings: accumulated depreciation at 1 January 2021Plant & machinery: costPlant & machinery: accumulated depreciation at 1 January 2021Trade payables8,000,0002,000,0003,750,0002,340,000520,000Trade receivables450,000Return outwards38,000Inventory at 1 January 2021267,000Revenue5,006,000Purchases3,200,0008% Debenture loan: repayable in 20262,000,000Debenture interest80,000Return inwards66,000Distribution costs382,000Administrative expensesPrepayment on building insurance at 1 January 2021Ordinary share capital514,00080,0005,000,00019,027,00019,027,000You are given the following information:Inventory at 31 December 2021 cost £300,000. This includes some slow-moving items which cwhich 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 comprofessional 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 whichad been purchased in 2019 for £30,000. Neither the sale nor the proceeds of sale have been accounteaccounting records of the company.4.The company's depreciation policy is to provide a full year's depreciation in the yearofасqno 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.

Every company maintains its records under which it prepares the financial statements which include…

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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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