The following balances were obtained from the books of company ABC on 30 June 2020. Trial Balance on 30 June 2020 ($000s) Dr. Cr. Cash Account payable 213 Account receivable Buildings Accumulated Depreciation - Buildings 1000 Interest expense Loan (repayable 2025) 505 Machinery Accumulated Depreciation - Machinery 190 Administrative salaries Retained earnings on 30 June 2019 230 Purchases of raw materials Advertising expense Revenue 1496 Share capital 155 Other reserves 215 Inventories on 30 June 2019 20 Dividend paid 40 Directors' remuneration 300 4004 4004 Additional information is given below. 1. Buildings are depreciated by straight line method to zero residual value assuming 20 years of useful life 2. Machinery is depreciated at 20% on the reducing balance basis. 3. Company income tax has been estimated at $30,000 for the year. No tax for the 2020 accounting year has been paid. 4. Inventories on 30 June 2020 were $15,000. 5. A lawsuit was yet to be finalised by the year end. The outcome of the lawsuit is uncertain and may result in $20,000 of damages to be paid to another company XYZ. You are required to prepare: a. an income statement for the year ended on 30 June 2020. 40 210 2000 80 500 282 450 82

The following balances were obtained from the books of company ABC on 30 June 2020. Trial Balance on 30 June 2020 ($000s) Dr. Cr. Cash Account payable 213 Account receivable Buildings Accumulated Depreciation - Buildings 1000 Interest expense Loan (repayable 2025) 505 Machinery Accumulated Depreciation - Machinery 190 Administrative salaries Retained earnings on 30 June 2019 230 Purchases of raw materials Advertising expense Revenue 1496 Share capital 155 Other reserves 215 Inventories on 30 June 2019 20 Dividend paid 40 Directors' remuneration 300 4004 4004 Additional information is given below. 1. Buildings are depreciated by straight line method to zero residual value assuming 20 years of useful life 2. Machinery is depreciated at 20% on the reducing balance basis. 3. Company income tax has been estimated at $30,000 for the year. No tax for the 2020 accounting year has been paid. 4. Inventories on 30 June 2020 were $15,000. 5. A lawsuit was yet to be finalised by the year end. The outcome of the lawsuit is uncertain and may result in $20,000 of damages to be paid to another company XYZ. You are required to prepare: a. an income statement for the year ended on 30 June 2020. 40 210 2000 80 500 282 450 82

Name: The following balances were obtained from the books of company ABC on
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Description: The following balances were obtained from the books of company ABC on 30 June 2020.Trial Balance on 30 June 2020 ($000s)Dr.Cr.CashAccount payable213Account receivableBuildingsAccumulated Depreciation - Buildings1000Interest expenseLoan (repayable 20

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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Pharoah Corporation's balance sheet at the end of 2019 included the following items. Current assets (Cash $82,000) $236,810 32,710 Land Buildings Equipment Accum. depr.-buildings Accum. depr.-equipment Patents Total 1. 2. 3. The following information is available for 2020. 4. 121,810 5. 92,710 (31,810 ) (11,000 ) 41,810 $483,040 Current liabilities Bonds payable Common stock Retained earnings Total $151,810 101,810 182,710 46,710 $483,040 Net income was $54,680. Equipment (cost $21,810 and accumulated depreciation $9,810) was sold for $11,810. Depreciation expense was $5,810 on the building and $10,810 on equipment. Patent amortization was $2,500. Current assets other than cash increased by $29,000. Current liabilities increased by $14,810.
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Closure, Inc. has prepared the following comparative statement of financial position for 2019 and 2020: 2020 2019 Equipment $1,260,000 $1,050,000 Accumulated depreciation (450,000) (375,000) Patent 153,000 174,000 Prepaid expenses 18,000 27,000 Inventory 150,000 180,000 Accounts Receivable 159,000 117,000 Cash 297,000 153,000 $1,587,000 $1,326,000 Share capital-preference $ 129,000 $ 66,000 Share premium-preference 582,000 0 Share capital-ordinary 153,000 153,000 Retained earnings 105,000 42,000 Mortgage payable 0 450,000 Accounts payable 120,000 135,000 Accrued liabilities 498,000 480,000 $1,587,000 $1,326,000 Additional Information: 1. The accumulated depreciation account has been credited only for the depreciation expense for the period. 2. The…
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