2. Dawn Engineering Limited commenced in business on 1 January 2017. On that date 200,000 ordinary...

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2. Dawn Engineering Limited commenced in business on 1 January 2017. On that date 200,000 ordinary shares were issued to shareholders at par (face value). The proceeds of this issue of shares were lodged to the company bank account. During the year ended 31 December 2017 the following transactions occurred: Transactions Notes: 1. 2. 3. 4. 5. Purchase of equipment Purchase of motor vehicles Purchase of stock on credit Term loan from bank Credit sales Insurance premiums paid Rent and rates paid Motor expenses paid Telephone charges paid Salaries paid Cash received from debtors Payments to creditors for stock Directors salaries paid Term loan interest charged Term loan repayments Dividends paid to shareholders Amount € 200,000 100,000 380,000 200,000 820,000 30,000 80,000 25,000 8,000 180,000 630,000 300,000 50,000 12,000 20,000 10,000 Stock at the 31 December 2017 was valued at €55,000. All money received by the business is lodged to the business bank account. All payments are made by cheque. Depreciation of fixed assets is to be calculated on cost at a rate of 20% per annum. Corporation tax for 2017 is estimated to be €15,000 and remains unpaid. Required: (a) Prepare the profit and loss account (income statement) of the company for the year ended 31 December 2017. (10 marks) (b) Prepare ledger (T) accounts for the bank, debtors, creditors and loan accounts. (10 marks) (c) Prepare the balance sheet (financial position) of the company at 31 December 2017. (10 marks) 2. Dawn Engineering Limited commenced in business on 1 January 2017. On that date 200,000 ordinary shares were issued to shareholders at par (face value). The proceeds of this issue of shares were lodged to the company bank account. During the year ended 31 December 2017 the following transactions occurred: Transactions Notes: 1. 2. 3. 4. 5. Purchase of equipment Purchase of motor vehicles Purchase of stock on credit Term loan from bank Credit sales Insurance premiums paid Rent and rates paid Motor expenses paid Telephone charges paid Salaries paid Cash received from debtors Payments to creditors for stock Directors salaries paid Term loan interest charged Term loan repayments Dividends paid to shareholders Amount € 200,000 100,000 380,000 200,000 820,000 30,000 80,000 25,000 8,000 180,000 630,000 300,000 50,000 12,000 20,000 10,000 Stock at the 31 December 2017 was valued at €55,000. All money received by the business is lodged to the business bank account. All payments are made by cheque. Depreciation of fixed assets is to be calculated on cost at a rate of 20% per annum. Corporation tax for 2017 is estimated to be €15,000 and remains unpaid. Required: (a) Prepare the profit and loss account (income statement) of the company for the year ended 31 December 2017. (10 marks) (b) Prepare ledger (T) accounts for the bank, debtors, creditors and loan accounts. (10 marks) (c) Prepare the balance sheet (financial position) of the company at 31 December 2017. (10 marks)

Answer rating: 100% (QA)

Step 13 Financial Statements are the Statements Prepared in order to assess the financial performance of the entity and determine the financial positi... View the full answer