EXAM
YouaretheassistantaccountantwithBEST EVERLtd.Yourbosshasaskedyoutoprepare thedraftIncomeStatement,StatementofFinancialPositionandStatementof
ChangesinEquityfortheyearended31December2014,forinternaluse,basedon
thefollowingTrialBalance(extractedfromthecomputerisedrecordkeepingsystem)
andtheadditionalinformationshownbelow.
The
company’s authorized share capital is as follows:
l 2,000,000
Ordinary Shares of £1 each
l 1,500,000 7% Preference
Shares of £1 each
DR CR
£000 £000
Profit & Loss Account (1 January
2014) 182
Revenue 5,250
Purchases 3,600
Inventory 220
Debtors
40
Creditors
38
Wages & Salaries 720
Administrative Expenses 540
Auditor’s fees 26
Heating & Lighting 43
Rent & Rates 137
Premises
2700
FixtureandFittings(NBV@31/12/2013) 730
MotorVehicles(NBV@31/12/2013) 380
Provision for Depreciation (1 January
2014)
Fixtures
& Fittings
146
Motor
Vehicles 152
Ordinary Share
Capital 2,000
7% Preference Share Capital 1,500
General Reserve 300
Cashandcashequivalents 432
9,668 9,668
AdditionalInformation
1 Clericalandmanagementstaffwereawardedabonusamountingto£4,000in
mid-December2014.Thisbonushasnotbeenpaidyetanditshouldbe
classifiedasanadministrativeexpense.
2 Rent & Ratesinclude£8,000whichrelatestothecomingyear.
3 Closinginventoryat31December2014wasvaluedat£280,000.
4 Itisestimatedthatcorporationtaxof£8,000willbepayableontheprofitsfor
theyear.
5 Preference Dividend shouldforthe yearshouldbeprovided in full.
6 An
Ordinary Dividend of 15p per share is proposed.
7 Thedirectorsproposetoprovideforthedepreciationofnon-currentassetsforthe
yearasfollows:
FixturesandFittings @ the rate of 20% per annum using the straight-line method
MotorVehicles @ the rate of 20% per annum using the straight-line
method
8 Transfer £8,000 to the General Reserve.
Pro forma layout
Please note that this pro forma
provides a guide to the structure and presentation of the financial statements
— it is not an exhaustive list of all possible items.
BEST EVERLtd
Income Statement for year ending
|
£000 |
£000 |
|
|
Revenue |
||
|
Less Cost of |
||
|
Gross Profit |
||
|
Less Expenses: |
||
|
Profit on |
||
|
Taxation |
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Profit on |
||
|
Less Appropriations |
||
Statement of
Financial Position as at
|
£000 |
£000 |
|
|
Non-current |
||
|
Current Assets |
||
|
Total Assets |
||
|
Capital and Reserves |
||
|
Equity |
||
|
Non-current |
||
|
Current |
||
|
Total Equity |
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