The following information is relevant: 1. Closing inventory at 30 November 2021 is £375,000. 2. On further investigation of the suspense account in the trial balance above, it was discovered that a cash payment made on 1 July 2021 of £21,000 posted to the suspense account represents the cost of purchase of computer equipment. 3. Pyramid Ltd depreciates non-current assets as follows: • computer equipment at 15 per cent on a straight line basis • motor vehicles at 20 per cent on a reducing balance basis. 4. Depreciation is charged on a monthly basis. No depreciation for the year ended 30 November 2021 has been entered into the accounting records. 5. On 30 November 2021, Pyramid Ltd. decided to write off a trade receivable of £5,500 and to make an allowance for irrecoverable receivables of 3 per cent of the outstanding receivables at that date. No entries have been made in the nominal ledger accounts. 6. A full year’s debenture interest is to be accrued. 7. Energy costs have been paid up to 30 September 2021. The next invoice covering the period 1 October 2021 to 31 December 2021 is expected to be for about £5,200. 8. On 1 July 2021 Pyramid Ltd paid £17,000 for rent to cover the period 1 July 2021 to 31 December 2021. 9. For the financial year ended 30 November 2021, corporation tax is estimated to be £27,800 and the audit fee is estimated to be £8,000. 10. Pyramid Ltd allocates expenses as follows: • depreciation on motor vehicles is allocated to distribution expenses • depreciation on computer equipment is allocated to administration expenses • salary is allocated 80% to administration and 20% to distribution expenses • energy expenses are allocated 70% to administration and 30% to distribution expenses • rent is allocated to administration expenses. Required: Prepare an income statement for the year ended 30 November 2021 and a balance sheet as at 30 November 2021 for Pyramid Ltd.
The following information is relevant:
1. Closing inventory at 30 November 2021 is £375,000.
2. On further investigation of the suspense account in the
was discovered that a cash payment made on 1 July 2021 of £21,000 posted to
the suspense account represents the cost of purchase of computer equipment.
3. Pyramid Ltd depreciates non-current assets as follows:
• computer equipment at 15 per cent on a straight line basis
• motor vehicles at 20 per cent on a reducing balance basis.
4.
30 November 2021 has been entered into the accounting records.
5. On 30 November 2021, Pyramid Ltd. decided to write off a trade receivable of
£5,500 and to make an allowance for irrecoverable receivables of 3 per cent of
the outstanding receivables at that date. No entries have been made in the
nominal ledger accounts.
6. A full year’s debenture interest is to be accrued.
7. Energy costs have been paid up to 30 September 2021. The next invoice
covering the period 1 October 2021 to 31 December 2021 is expected to be for
about £5,200.
8. On 1 July 2021 Pyramid Ltd paid £17,000 for rent to cover the period 1 July
2021 to 31 December 2021.
9. For the financial year ended 30 November 2021, corporation tax is estimated to
be £27,800 and the audit fee is estimated to be £8,000.
10. Pyramid Ltd allocates expenses as follows:
• depreciation on motor vehicles is allocated to distribution expenses
• depreciation on computer equipment is allocated to administration expenses
• salary is allocated 80% to administration and 20% to distribution expenses
• energy expenses are allocated 70% to administration and 30% to distribution
expenses
• rent is allocated to administration expenses.
Required:
Prepare an income statement for the year ended 30 November 2021 and a
sheet
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