The trial balance of Beta shows the following balances at 31 December 2021: Dr Cr $000 $000 Issued share capital (500,000 shares) 500 Share premium 20 Finance costs 70 Retained earnings 1 January 2021 346 Inventory (raw materials) at 1 January 2021 60 Sales 1170 Purchases 890 Purchases returns 26 Sales returns 28 Carriage outwards 28 Work-in-progress at 1 January 2021 80 Intangible assets 170 Administrative wages 30 Warehouse plant and equipment – cost 92 Accumulated depreciation – 1 January 2021 30 Delivery vehicle hire 20 Distribution expenses 30 Administrative expenses 10 Directors’ salaries 30 Sales allowances 6 Investment income 30 Bank overdraft 20 Trade receivables 380 Cash at bank 110 Land 120 2148 2148 Additional information: Inventories at 31 December 2021 were valued at $12,000. Work-in-progress at 31 December 2021 was valued at $3,000 Depreciation charges (plant and equipment) for the year amounting to $7,000 and $2,000 should be included in distribution costs and administrative expenses, respectively. The income tax for the year is evaluated as $20,000 A final dividend of $0.50 per share was declared on 31 March 2022. There were no disposals of any non-current assets during the year. Land was revalued at 31 December 2021 to $100,000. No entries have yet been made to record this. Life insurance for general director is to be accrued $3,000. Receivables totalling $14,000 are to be written off General reserve is to be created as $2,000 Allowance for receivables should be created as 2% of net receivables Required: Prepare a) a statement of profit or loss and other comprehensive income for the year ended 31 December 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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Question

The trial balance of Beta shows the following balances at 31 December 2021:

	Dr	Cr
	$000	$000
Issued share capital (500,000 shares)		500
Share premium		20
Finance costs	70
Retained earnings 1 January 2021		346
Inventory (raw materials) at 1 January 2021	60
Sales		1170
Purchases	890
Purchases returns		26
Sales returns	28
Carriage outwards	28
Work-in-progress at 1 January 2021	80
Intangible assets	170
Administrative wages	30
Warehouse plant and equipment – cost	92
Accumulated depreciation – 1 January 2021		30
Delivery vehicle hire	20
Distribution expenses	30
Administrative expenses	10
Directors’ salaries	30
Sales allowances		6
Investment income		30
Bank overdraft		20
Trade receivables	380
Cash at bank	110
Land	120
	2148	2148

Additional information:

Inventories at 31 December 2021 were valued at $12,000.
Work-in-progress at 31 December 2021 was valued at $3,000
Depreciation charges (plant and equipment) for the year amounting to $7,000 and $2,000 should be included in distribution costs and administrative expenses, respectively.
The income tax for the year is evaluated as $20,000
A final dividend of $0.50 per share was declared on 31 March 2022.
There were no disposals of any non-current assets during the year. Land was revalued at 31 December 2021 to $100,000. No entries have yet been made to record this.
Life insurance for general director is to be accrued $3,000.
Receivables totalling $14,000 are to be written off
General reserve is to be created as $2,000
Allowance for receivables should be created as 2% of net receivables

Required:

Prepare

a) a statement of profit or loss and other comprehensive income for the year ended 31 December 2021,

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