Use the following list of transactions and the balance sheet for 2019 of ABC Ltd. to prepare: a) The income statement for 2020 b) The balance sheet for 2020 Insurance is paid on 1/7/2019 for 8,000 £. The policy covers the period until 31/6/2020 Rent for the year is 24,000 £. During the year, the company paid 23,000 £ to its landlord ABC Ltd. employs 4 members of staff, each with a yearly salary of 45,500 £. At the end of the year, ABC owes its staff one week of wages.
Question 1
Use the following list of transactions and the balance sheet for 2019 of ABC Ltd. to prepare:
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a) The income statement for 2020
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b) The balance sheet for 2020
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Insurance is paid on 1/7/2019 for 8,000 £. The policy covers the period until 31/6/2020
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Rent for the year is 24,000 £. During the year, the company paid 23,000 £ to its landlord
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ABC Ltd. employs 4 members of staff, each with a yearly salary of 45,500 £. At the end of
the year, ABC owes its staff one week of wages.
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Inventories were bought for 35,000 £ in cash and 176,000 £ on credit.
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Cash sales were 67,500 £ (cost of sales 32,000) and credit sales 383,400 (cost of sales
112,300).
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A customer returned 5,700 £ worth of goods receiving a cash refund.
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The company received payments of 343,500 £ from trade receivables. A customer paid
early and the company granted him a discount of 2,000 £.
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ABC paid 134,600 £ towards trade payables.
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Electricity expenses were 7,500 £ for the first three quarter of the year. The bill for Q4 will
be paid in January and the company expects electricity costs to be constant.
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ABC paid 3% interest over its loan balance at the beginning of the year. Over the year, the
company paid back 20,000 £ to the bank.
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ABC sold its vehicle in December for 15,000 £ in cash. Depreciation on the vehicle is
charged in full during the year.
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Corporation tax is 20%. Taxes are paid 50% in arrears.
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Vehicles are
depreciated using thereducing balance method , with 30% yearly.depreciation. Depreciation on machinery is 5,000 £ and on building 3,000 £.
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ABC paid a dividend of 15,000 £ to shareholders.
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