The following balances were obtained from the books of The Hartland Ltd as at December 31, 2015: DETAILS DR CR Premises 800,000 10% Mortgage Retained earnings 250,000 Goodwill Debtors 40,000 100,000 110,000 Creditors General reserves 65,000 30,000 Management fees Ordinary shares @ $0.50 | 5% Preference shares @ $1 Share premium |Motor vehicle Prov. for depreciation on motor vehicle 30,000 200,000 200,000 50,000 80,000 12,000 120,000 10% Debenture Mortgage interest Debenture interest 7,000 5,000 750,000 80,000 Cost of sales Closing stock Insurance 20,000 60,000 Wages & salaries Interim ordinary shares dividend Bank 2,000 53,000 1,100,000 4,000 2,084,000 Sales Commission received 2,084,000 Notes: a. Provide for depreciation on motor vehicle at 5% on the reducing balance b. Insurance is prepaid by $4,000 while wages and salaries is owing by $20,000 c. The goodwill should be written down by 25% d. Transfer $25,000 from profits to the general reserves e. Corporation tax is estimated at $30,000

The following balances were obtained from the books of The Hartland Ltd as at December 31, 2015: DETAILS DR CR Premises 800,000 10% Mortgage Retained earnings 250,000 Goodwill Debtors 40,000 100,000 110,000 Creditors General reserves 65,000 30,000 Management fees Ordinary shares @ $0.50 | 5% Preference shares @ $1 Share premium |Motor vehicle Prov. for depreciation on motor vehicle 30,000 200,000 200,000 50,000 80,000 12,000 120,000 10% Debenture Mortgage interest Debenture interest 7,000 5,000 750,000 80,000 Cost of sales Closing stock Insurance 20,000 60,000 Wages & salaries Interim ordinary shares dividend Bank 2,000 53,000 1,100,000 4,000 2,084,000 Sales Commission received 2,084,000 Notes: a. Provide for depreciation on motor vehicle at 5% on the reducing balance b. Insurance is prepaid by $4,000 while wages and salaries is owing by $20,000 c. The goodwill should be written down by 25% d. Transfer $25,000 from profits to the general reserves e. Corporation tax is estimated at $30,000

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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