The following the trial balance was extracted from the nominal ledger of Hexham plc on 31...

  

Transcribed Image Text:

The following the trial balance was extracted from the nominal ledger of Hexham plc on 31 March 20X8: Debit Credit Sales 1.150.000 Inventories at 1 April 20X7 Purchases 75,000 465,000 220,000 Distribution costs Administrative expenses Irrecoverable debts expense Loan interest paid Land and building costs Plant and equipment cost Accumulated depreciation Land & building at 1 April 20X7 Accumulated depreciation Plant & equipment at 1 April 20X7 Trade receivables Allowance for receivables Bank overdraft Ordinary share (£ 1/shares) Share premium 340,000 36,000 8,000 600,000 340,000 96,000 63,000 60,000 5,000 24,000 400,000 100,000 200,000 61,000 Bank loan Retained earnings Dividend Trade payables Advance deposits from customers 15,000 54,000 6,000 2,159,000 2,159,000 The following adjustments have yet to be accounted for: 1. Hexham plc has 2 types of inventory on March 31, 20X8, Details are as follows: Item X £ Cost Net realizable value 16,200 15,000 76,000 83,600 2. Hexham plc paid its annual insurance premium of £16,800 for the year 1 September 20X7 to 31 August 20X8. This payment is included in administrative expenses. 3. The company's depreciation policy is as follows: Buildings Plant and equipment straight-line, over 50 years 10% straight-line The cost of the land was £200,000, and all non-current assets are assumed to have zero residual values. There were no additions to or disposals of non-current assets during the year ended 31 March 20X8. Depreciation on buildings is charged to administrative expenses, and depreciation on plant and equipment is charged to cost of sales. 4.At the year end, trade receivables include a considered balance of £ 4,800 irrecoverable. The Hexham plc adjusts its allowance for receivables on 31 March 20x8 as much as £2,760. Hexham plc serves irrecoverable debts as other operating expenses. 5. The bank loan was received on 1 July 20x7 and is repayable in full in five years. Interest is charged at a fixed rate of 8% per annum. 6. Income tax for the year ended 31 March 20X8 is estimated at £10,000. 7. Hexham plc products come with a 6 month warranty, Management estimates that 5% of warranties will be invoked, at a cost of £15,000 to Hexham plc. Provisions are charged to other operating expenses. 8. Hexham plc paid rent of £25,000 pada 27 March 20x8 which covers the period 1 April 20X8 to 30 June 20X8. This amount has been included in administrative expenses. Requested: 1. Calculate the cost of sales and administrative expenses. 2. Calculate other operating expenses and trade receivable. 3. Calculate the finance costs. 4. Calculate the carrying amount of property, plant, & equipment 5. Prepare a profit or loss statement for Hexham plc for the year ended 31 March 20X8. 6. Prepare a retained earnings statement for Hexham plc for the year ending 31 March 20X8, 7. Prepare a statement of financial position as of 31 March 20X8. The following the trial balance was extracted from the nominal ledger of Hexham plc on 31 March 20X8: Debit Credit Sales 1.150.000 Inventories at 1 April 20X7 Purchases 75,000 465,000 220,000 Distribution costs Administrative expenses Irrecoverable debts expense Loan interest paid Land and building costs Plant and equipment cost Accumulated depreciation Land & building at 1 April 20X7 Accumulated depreciation Plant & equipment at 1 April 20X7 Trade receivables Allowance for receivables Bank overdraft Ordinary share (£ 1/shares) Share premium 340,000 36,000 8,000 600,000 340,000 96,000 63,000 60,000 5,000 24,000 400,000 100,000 200,000 61,000 Bank loan Retained earnings Dividend Trade payables Advance deposits from customers 15,000 54,000 6,000 2,159,000 2,159,000 The following adjustments have yet to be accounted for: 1. Hexham plc has 2 types of inventory on March 31, 20X8, Details are as follows: Item X £ Cost Net realizable value 16,200 15,000 76,000 83,600 2. Hexham plc paid its annual insurance premium of £16,800 for the year 1 September 20X7 to 31 August 20X8. This payment is included in administrative expenses. 3. The company's depreciation policy is as follows: Buildings Plant and equipment straight-line, over 50 years 10% straight-line The cost of the land was £200,000, and all non-current assets are assumed to have zero residual values. There were no additions to or disposals of non-current assets during the year ended 31 March 20X8. Depreciation on buildings is charged to administrative expenses, and depreciation on plant and equipment is charged to cost of sales. 4.At the year end, trade receivables include a considered balance of £ 4,800 irrecoverable. The Hexham plc adjusts its allowance for receivables on 31 March 20x8 as much as £2,760. Hexham plc serves irrecoverable debts as other operating expenses. 5. The bank loan was received on 1 July 20x7 and is repayable in full in five years. Interest is charged at a fixed rate of 8% per annum. 6. Income tax for the year ended 31 March 20X8 is estimated at £10,000. 7. Hexham plc products come with a 6 month warranty, Management estimates that 5% of warranties will be invoked, at a cost of £15,000 to Hexham plc. Provisions are charged to other operating expenses. 8. Hexham plc paid rent of £25,000 pada 27 March 20x8 which covers the period 1 April 20X8 to 30 June 20X8. This amount has been included in administrative expenses. Requested: 1. Calculate the cost of sales and administrative expenses. 2. Calculate other operating expenses and trade receivable. 3. Calculate the finance costs. 4. Calculate the carrying amount of property, plant, & equipment 5. Prepare a profit or loss statement for Hexham plc for the year ended 31 March 20X8. 6. Prepare a retained earnings statement for Hexham plc for the year ending 31 March 20X8, 7. Prepare a statement of financial position as of 31 March 20X8.

Answer rating: 100% (QA)

1 Cost of sales Cost of sales Opening Stock 75000 Purchases 465000 Less Closing Stock 91000 449000 A... View the full answer