ABC, a limited liability company, has the following trial balance at 31 December 20X9. Debit Credit...

 

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ABC, a limited liability company, has the following trial balance at 31 December 20X9. Debit Credit $'000 $'000 100 Cash at bank Inventory at 1 January 20X9. Administrative expenses Distribution costs Non-current assets at cost: Buildings Plant and equipment Motor vehicles Suspense Accumulated depreciation: Buildings Plant and equipment Motor vehicles Retained earnings Trade receivables Purchases Dividend paid Sales revenue Sales tax payable Trade payables Share premium $1 ordinary shares 2,400 2,206 650 10,000 1,400 320 876 4,200 200 22352 1,500 4,000 480 120 560 11,752 1,390 1,050 500 1,000 22352 The following additional information is relevant. (a) Inventory at 31 December 20X9 was valued at $1,600,000. While doing the inventory count, errors in the previous year's inventory count were discovered. The inventory brought forward at the beginning of the year should have been $2.2m, not $2.4m as above. (b) Depreciation is to be provided as follows: (i) Buildings at 5% straight line, charged to administrative expenses. (ii) Plant and equipment at 20% on the reducing balance basis, charged to cost of sales. (iii) Motor vehicles at 25% on the reducing balance basis, charged to distribution costs. (c) No final dividend is being proposed. (d) A customer has gone bankrupt owing $76,000. This debt is not expected to be recovered and an adjustment should be made. An allowance for receivables of 5% is to be set up. (e) 1 million new ordinary shares were issued at $1.50 on 1 December 20X9. The proceeds have been left in a suspense account. Required Prepare the income statement for the year to 31 December 20X9, in accordance with the requirements of International Financial Accounting Reporting Standards. Ignore Taxation. ABC, a limited liability company, has the following trial balance at 31 December 20X9. Debit Credit $'000 $'000 100 Cash at bank Inventory at 1 January 20X9. Administrative expenses Distribution costs Non-current assets at cost: Buildings Plant and equipment Motor vehicles Suspense Accumulated depreciation: Buildings Plant and equipment Motor vehicles Retained earnings Trade receivables Purchases Dividend paid Sales revenue Sales tax payable Trade payables Share premium $1 ordinary shares 2,400 2,206 650 10,000 1,400 320 876 4,200 200 22352 1,500 4,000 480 120 560 11,752 1,390 1,050 500 1,000 22352 The following additional information is relevant. (a) Inventory at 31 December 20X9 was valued at $1,600,000. While doing the inventory count, errors in the previous year's inventory count were discovered. The inventory brought forward at the beginning of the year should have been $2.2m, not $2.4m as above. (b) Depreciation is to be provided as follows: (i) Buildings at 5% straight line, charged to administrative expenses. (ii) Plant and equipment at 20% on the reducing balance basis, charged to cost of sales. (iii) Motor vehicles at 25% on the reducing balance basis, charged to distribution costs. (c) No final dividend is being proposed. (d) A customer has gone bankrupt owing $76,000. This debt is not expected to be recovered and an adjustment should be made. An allowance for receivables of 5% is to be set up. (e) 1 million new ordinary shares were issued at $1.50 on 1 December 20X9. The proceeds have been left in a suspense account. Required Prepare the income statement for the year to 31 December 20X9, in accordance with the requirements of International Financial Accounting Reporting Standards. Ignore Taxation.

Answer rating: 100% (QA)

Income statement for ABC for the year to 31 December 20X9 Income Statement for the year to 31 Decemb... View the full answer