The following balances were obtained from the books of Tim Curry plc as at December 31, 2020. DR CR Cost of Sales 758,500 Closing Stock 210,000 10 % Debenture 350,000 Debenture Interest 20,000 General Reserves 40,000 5% Loan 200,000 Loan Interest 6,000 Retained Earnings 20,000 Goodwill 200,000 Ordinary Share Capital @ $2 400,000 10 % Preference Share Capital @ $1 400,000 Share Premium 30,000 Sales Turnover 1,300,000 Debtors 60,000 Bank 8,000 Provision for Bad Debts 5,000 Wages and Salaries 122,000 Insurance 47,000 Management Fees 60,000 Directors Fees 40,000 Motor Vehicle 500,000 Provision for Depn on Motor Vehicle 40,000 Premises 550,000 Machinery and Equipment 220,000 Creditors 33,000 Provision for Depn Mach & Equip 37,500 Interim Preference Shares Dividends 25,000 Interim Ordinary Shares Dividend 5,000 2,843,500 2,843,500 Additional Notes Wages and salaries owing by 8,000; Insurance is prepaid by 7,000 Provide for depreciation as follows Motor Vehicle 10% RB Machinery and Equipment 5% SL Goodwill is to be amortized by 15% Corporation tax is estimated to be 42,000 The provision for bad debts is to be revised to 10% of debtors. The adjustment is to be treated as administrative expenses Transfer 20,000 from profits to the general reserves The operating expenses are to be apportioned as follows Admin Selling & Dist Wages and Salaries 60% 40% Insurance 50% 50% Management Fees 50% 50% Directors Fees 70% 30% Depreciation 40% 60% The following proposals were approved by the directors Final ordinary shares premium @ 5% New issue of 50,000 Ordinary shares for a total value of 110,000 Question Prepare the following a) The Statement of Profit and Loss b) The Statement of Change in Equity c) The Statement of Financial Position

The following balances were obtained from the books of Tim Curry plc as at December 31, 2020. DR CR Cost of Sales 758,500 Closing Stock 210,000 10 % Debenture 350,000 Debenture Interest 20,000 General Reserves 40,000 5% Loan 200,000 Loan Interest 6,000 Retained Earnings 20,000 Goodwill 200,000 Ordinary Share Capital @ $2 400,000 10 % Preference Share Capital @ $1 400,000 Share Premium 30,000 Sales Turnover 1,300,000 Debtors 60,000 Bank 8,000 Provision for Bad Debts 5,000 Wages and Salaries 122,000 Insurance 47,000 Management Fees 60,000 Directors Fees 40,000 Motor Vehicle 500,000 Provision for Depn on Motor Vehicle 40,000 Premises 550,000 Machinery and Equipment 220,000 Creditors 33,000 Provision for Depn Mach & Equip 37,500 Interim Preference Shares Dividends 25,000 Interim Ordinary Shares Dividend 5,000 2,843,500 2,843,500 Additional Notes Wages and salaries owing by 8,000; Insurance is prepaid by 7,000 Provide for depreciation as follows Motor Vehicle 10% RB Machinery and Equipment 5% SL Goodwill is to be amortized by 15% Corporation tax is estimated to be 42,000 The provision for bad debts is to be revised to 10% of debtors. The adjustment is to be treated as administrative expenses Transfer 20,000 from profits to the general reserves The operating expenses are to be apportioned as follows Admin Selling & Dist Wages and Salaries 60% 40% Insurance 50% 50% Management Fees 50% 50% Directors Fees 70% 30% Depreciation 40% 60% The following proposals were approved by the directors Final ordinary shares premium @ 5% New issue of 50,000 Ordinary shares for a total value of 110,000 Question Prepare the following a) The Statement of Profit and Loss b) The Statement of Change in Equity c) The Statement of Financial Position

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 balances were obtained from the books of Tim Curry plc as at December 31, 2020.

	DR	CR
Cost of Sales	758,500
Closing Stock	210,000
10 % Debenture		350,000
Debenture Interest	20,000
General Reserves		40,000
5% Loan		200,000
Loan Interest	6,000
Retained Earnings	20,000
Goodwill	200,000
Ordinary Share Capital @ $2		400,000
10 % Preference Share Capital @ $1		400,000
Share Premium		30,000
Sales Turnover		1,300,000
Debtors	60,000
Bank		8,000
Provision for Bad Debts		5,000
Wages and Salaries	122,000
Insurance	47,000
Management Fees	60,000
Directors Fees	40,000
Motor Vehicle	500,000
Provision for Depn on Motor Vehicle		40,000
Premises	550,000
Machinery and Equipment	220,000
Creditors		33,000
Provision for Depn Mach & Equip		37,500
Interim Preference Shares Dividends	25,000
Interim Ordinary Shares Dividend	5,000
	2,843,500	2,843,500

Additional Notes

Wages and salaries owing by 8,000; Insurance is prepaid by 7,000
Provide for depreciation as follows

Motor Vehicle	10% RB
Machinery and Equipment	5% SL

Goodwill is to be amortized by 15%
Corporation tax is estimated to be 42,000
The provision for bad debts is to be revised to 10% of debtors. The adjustment is to be treated as administrative expenses
Transfer 20,000 from profits to the general reserves
The operating expenses are to be apportioned as follows

	Admin	Selling & Dist

Wages and Salaries	60%	40%
Insurance	50%	50%
Management Fees	50%	50%
Directors Fees	70%	30%
Depreciation	40%	60%

The following proposals were approved by the directors
Final ordinary shares premium @ 5%
New issue of 50,000 Ordinary shares for a total value of 110,000

Question

Prepare the following

a) The Statement of Profit and Loss

b) The Statement of Change in Equity

c) The Statement of Financial Position

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