The Whispering Cove plc has provided the following as at December 31, 2017 DR CR Cost of Sales 700,000 Closing Stock 210,000 10 % Debenture 350,000 Debenture Interest 20,000 General Reserves 40,000 Retained Earnings 20,000 Goodwill 200,000 Ordinary Share Capital @ $2 400,000 10 % Preference Share Capital @ $1 400,000 Sales Turnover 1,300,000 Debtors 60,000 Bank 8,000 Administrative Costs 122,000 Selling and Distribution Costs 139,000 Property Plant & Equipment 600,000 Motor Vehicle 500,000 Provision for Depreciation on Motor Vehicle 40,000 Creditors 38,000 Interim Ordinary Shares Dividend 5,000 2,576,000 2,576,000 Additional Details Provided The motor vehicle is to be depreciated at 10% p.a. on the reducing balance basis. The annual depreciation charge is to be added equally to the administrative costs and selling and distribution costs The administrative costs were prepaid by $2,000; while the selling and distribution costs were owing by $6,000 The goodwill is to be written down by 25% Prior to the end of the year the directors voted to support a resolution to pay final ordinary shares dividends at $0.10 per share; as well as the amount due for the preference shares dividends.` The corporation tax is estimated at $40,000 Question Prepare the following for the year ending December 31, 2017 : a) The Statement of Profit and Loss b) The Statement of Change in Equity

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 Whispering Cove plc has provided the following as at December 31, 2017

	DR	CR
Cost of Sales	700,000
Closing Stock	210,000
10 % Debenture		350,000
Debenture Interest	20,000
General Reserves		40,000
Retained Earnings	20,000
Goodwill	200,000
Ordinary Share Capital @ $2		400,000
10 % Preference Share Capital @ $1		400,000
Sales Turnover		1,300,000
Debtors	60,000
Bank		8,000
Administrative Costs	122,000
Selling and Distribution Costs	139,000
Property Plant & Equipment	600,000
Motor Vehicle	500,000
Provision for Depreciation on Motor Vehicle		40,000
Creditors		38,000
Interim Ordinary Shares Dividend	5,000
	2,576,000	2,576,000