After completion of the Trading Account, the following balances were extracted from the books of Peter Jordan
Question:
After completion of the Trading Account, the following balances were extracted from the books of Peter Jordan plc on 30 April 2006.
Authorized and issued share capital
Ordinary shares $1 each fully paid 1 500 000
7% Preference shares of $1 each fully paid 200 000
Premises 2 300 000
Motor vehicles 500 000
Fixtures and fittings 170 000
Provision for depreciation on motor vehicles 375 000
Provision for depreciation on fixtures and fittings 102 000
Gross profit 1 620 000
Stock 204 000
Office expenses 458 000
Selling and distribution expenses 486 000
6% debentures – 2011 (issued in 2001) 100 000
Debenture interest paid 3 000
Retained profit – 1 May 2005 143 600
Debtors 132 000
Creditors 116 000
Bank Overdraft 26 800
Cash 400
Share premium 150 000
Interim dividend paid – ordinary shares 75 000
preference shares 8 000
Provision for doubtful debts 3 000
Additional information at 30 April 2006:
- On April 30th 2006, 60,000 preference shares were redeemed from the proceeds of 40,000 ordinary shares issued at a price of $1.50 per share. A bonus issue of 1 in every 15 shares held was then made to existing share-holders.
- Office expenses prepaid $8 000
- Selling and distribution expenses accrued $23 000
- Provision for doubtful debts to be maintained at 2% of debtors
- Depreciation to be provided as follows:
Motor vehicles 50% per annum reducing (diminishing) balance
Fixtures and fittings 20% per annum on cost
- The following are proposed:
- Final dividend of $0.10 per share to be paid to ordinary shareholders based on shares after bonus issue.
- Remaining dividend due is to be paid to preference shareholders on their share balance before redemption.
Required:
- Prepare Peter Jordan plc’s Profit and loss and appropriation Account for the year ended 30 April 2006.
- Prepare Peter Jordan plc’s Balance Sheet at 30 April 2006.
Expert Answer:
Answer Peter Jordan plcs Profit and loss and appropriation Account for the year ended 30 April 2006 Gross Profit bd 1620000 Provision for doubtful deb... View the full answer
