The following additional financial data was also available as at 31/12/2021: Inventory value was £12,000,000. The amount paid for marketing expenses to the year-end includes £5,000,000, which is for the next accounting period. The company had outstanding business rate of £500,000. 8% of the company motor vehicles were used by the senior management of the company for company business. The company depreciation policy is as follows: The depreciation rate on motor vehicles is 30% on a reducing balance basis. The depreciation on office equipment is 40% on cost. The authorised ordinary share capital is 200,000,000 shares at 80p each. The authorised 10% preference share capital is 50,000,000 shares at 60p each. A trade receivable of £12,000,000 was irrecoverable. The provision for doubtful debts is to be 5% on trade receivables. Preference share dividends were paid by bank transfers, and not reflected in the relevant books of accounts listed in the trial balance Show all necessary workings and proper headings of the financial statements: For ABC Ltd., prepare the following: Income Statement for the year ended 31/12/2021. Statement of Financial Position as at 31/12/2021.

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 following additional financial data was also available as at 31/12/2021:

Inventory value was £12,000,000.
The amount paid for marketing expenses to the year-end includes £5,000,000, which is for the next accounting period.
The company had outstanding business rate of £500,000.
8% of the company motor vehicles were used by the senior management of the company for company business.
The company depreciation policy is as follows:
The depreciation rate on motor vehicles is 30% on a reducing balance basis.
The depreciation on office equipment is 40% on cost.

The authorised ordinary share capital is 200,000,000 shares at 80p each.
The authorised 10% preference share capital is 50,000,000 shares at 60p each.
A trade receivable of £12,000,000 was irrecoverable.
The provision for doubtful debts is to be 5% on trade receivables.
Preference share dividends were paid by bank transfers, and not reflected in the relevant books of accounts listed in the trial balance

Show all necessary workings and proper headings of the financial statements:

For ABC Ltd., prepare the following:

Income Statement for the year ended 31/12/2021.

Statement of Financial Position as at 31/12/2021.

Trial Balance as at 31/12/2021
Figures in £'000
DR
CR
4% Debenture repayable in 2030
30,000
Debenture interest
1,800
Goodwill
12,800
Retained profit as at 01/01/2021
11,600
Motor vehicles – Net book value
68,000
Maintenance of motor vehicles
4,500
Land
75,000
Maintenance of land
1,500
Office equipment – Cost
34,000
Sales revenue and Purchases
226,000 380,000
Provision for doubtful debts as at 01/01/2021
1,400
Miscellaneous expenses
6,000
Senior management remuneration
4,000
Insurance
1,900
Salaries
72,000
Business rates
2,400
Utilities
4,600
Trade payables and receivables
30,000 27,000
Inventory as at 01/01/2021
33,000
Bank
6,400
Cash
1,700
Marketing expenses
16,000
General reserves
23,000
Sales and Purchases returns
3,000
3,600
Issued ordinary share capital – 80p/share
100,000
Issued 10% preference share capital –
60p/share
28,000
604,600 604,600

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