The following trial balance was extracted from the books of Night shade Ltd. as at 30 September 2020: 24 Land and buildings Motor vehicles at cost 151,000 60,000 Accumulated depreciation on motor vehicle (1 October 2019) 15,000 Purchases and sales 1,204,000 1,574,050 Inventory (1 October 2019) 91,000 Revenue reserves 66,700 General expenses Salaries and wages Electricity 2,325 244,150 5,600 Bank balance 42,200 Interim dividend paid 7,000 Motor vehicles expenses 4,475 Insurance 7,150 Discounts allowed and discounts received 10,900 8,300 Bad debts written off 3,050 Accounts receivable and accounts payable 136,500 100,700 Debenture interest paid 2,400 Ordinary shares ($ 40 par value) Share premium 160,000 36,000 8% debentures 60,000 Cash in hand 9,000 Directors' fees 40,000 2,020,750 2,020,750 Additional information: 1. IGoods costing $710 purchased on credit on 29 September 2020, were in transit and therefore had not been entered in the books by close of business on 30 September 2020. 2. Inventory as at September 2020 was valued at $112, 300 3. A debtor who owed the company $1,500 was declared bankrupt. His debt has not yet been written off. 4. Allowance for doubtful debts is to be set at 2% of the outstanding receivables. 5. Depreciation is to be provided on motor vehicles at a rate of 20% per annum on cost. 6. As at 30 September 2020, outstanding motor vehicles expenses amounted to $125, 000 while pre-paid insurance amounted to $150. 7. Invoices issued amounted to $950 had completely been omitted from the records as at 30 September 2020. 8. Provision is to be made for outstanding debenture interest and corporation tax of $22,975. 9. The directors have proposed a final dividend of $2.50 per share. Required: 1. Income statement for the year ended 30 September 2020. 2. Statement of financial position as at 30 September 2020.
The following trial balance was extracted from the books of Night shade Ltd. as at 30 September 2020: 24 Land and buildings Motor vehicles at cost 151,000 60,000 Accumulated depreciation on motor vehicle (1 October 2019) 15,000 Purchases and sales 1,204,000 1,574,050 Inventory (1 October 2019) 91,000 Revenue reserves 66,700 General expenses Salaries and wages Electricity 2,325 244,150 5,600 Bank balance 42,200 Interim dividend paid 7,000 Motor vehicles expenses 4,475 Insurance 7,150 Discounts allowed and discounts received 10,900 8,300 Bad debts written off 3,050 Accounts receivable and accounts payable 136,500 100,700 Debenture interest paid 2,400 Ordinary shares ($ 40 par value) Share premium 160,000 36,000 8% debentures 60,000 Cash in hand 9,000 Directors' fees 40,000 2,020,750 2,020,750 Additional information: 1. IGoods costing $710 purchased on credit on 29 September 2020, were in transit and therefore had not been entered in the books by close of business on 30 September 2020. 2. Inventory as at September 2020 was valued at $112, 300 3. A debtor who owed the company $1,500 was declared bankrupt. His debt has not yet been written off. 4. Allowance for doubtful debts is to be set at 2% of the outstanding receivables. 5. Depreciation is to be provided on motor vehicles at a rate of 20% per annum on cost. 6. As at 30 September 2020, outstanding motor vehicles expenses amounted to $125, 000 while pre-paid insurance amounted to $150. 7. Invoices issued amounted to $950 had completely been omitted from the records as at 30 September 2020. 8. Provision is to be made for outstanding debenture interest and corporation tax of $22,975. 9. The directors have proposed a final dividend of $2.50 per share. Required: 1. Income statement for the year ended 30 September 2020. 2. Statement of financial position as at 30 September 2020.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter1: Accounting And The Financial Statements
Section: Chapter Questions
Problem 40E: Exercise 1-40 Depreciation OBJECTIVE 0° Swanson Products was organized as a new business on January...
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Transcribed Image Text:Question 6:
The following trial balance was extracted from the books of Night shade Ltd. as at 30 September 2020:
%24
$
Land and buildings
151,000
Motor vehicles at cost
60,000
Accumulated depreciation on motor vehicle (1 October 2019)
15,000
Purchases and sales
1,204,000 1,574,050
Inventory (1 October 2019)
91,000
Revenue reserves
66,700
General expenses
2,325
Salaries and wages
244,150
Electricity
5,600
Bank balance
42,200
Interim dividend paid
7,000
Motor vehicles expenses
4,475
Insurance
7,150
Discounts allowed and discounts received
10,900
8,300
Bad debts written off
3,050
Accounts receivable and accounts payable
136,500
100,700
Debenture interest paid
2,400
Ordinary shares ($ 40 par value)
Share premium
160,000
36,000
8% debentures
60,000
Cash in hand
9,000
Directors' fees
40,000
2,020,750 2,020,750
Additional information:
1. IGoods costing $710 purchased on credit on 29 September 2020, were in transit and therefore had not been entered in the books by close of business on 30 September 2020.
2. Inventory as at September 2020 was valued at $112, 300
3. A debtor who owed the company $1,500 was declared bankrupt. His debt has not yet been written off.
4. Allowance for doubtful debts is to be set at 2% of the outstanding receivables.
5. Depreciation is to be provided on motor vehicles at a rate of 20% per annum on cost.
6. As at 30 September 2020, outstanding motor vehicles expenses amounted to $125, 000 while pre-paid insurance amounted to $150.
7. Invoices issued amounted to $950 had completely been omitted from the records as at 30 September 2020.
8. Provision is to be made for outstanding debenture interest and corporation tax of $22,975.
9. The directors have proposed a final dividend of $2.50 per share.
Required:
1. Income statement for the year ended 30 September 2020.
2. Statement of financial position as at 30 September 2020.
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