CLIFTON PHARMA LIMITED The following trial balance relates to Clifton Pharma Limited for the financial year...
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CLIFTON PHARMA LIMITED The following trial balance relates to Clifton Pharma Limited for the financial year ended 30 September 2018, assume you are working as an Accounts Executive in this Company. Dr. Cr. 134,000 35,000 Cost of sales Operating Expenses Loan interest paid (see note 1) Rental of vehicles (see note 2) 1,500 7,000 Revenue 338,300 Investment income 2,000 250,000 Leasehold property at cost (see note 4) Plant and machinery at cost Accumulated depreciation at 1 October 2017: Leashold property Plant and equipment 197,000 40,000 47,000 Investments 94,000 Share capital 280,000 Share premium 20,000 Retained earnings at 1 October 2017 19,300 Loan notes (see note 1) 50,000 Deferred tax balance at 1 October 2017 (see note 5) 20,000 Inventory at 30 September 2018 Trade receivables 23,700 76,400 Trade payables 14,100 Bank 12,100 830,700 830,700 The following information is relevant for the preparation of financial statements for the year ended 30 September 2018: 1) The effective interest rate on the loan notes is 6% per year. A recent review by the finance department of lease contract has reached the conclusion that £ 7,000 was 2) paid: the lease agreement is for a four-year period in total, and there will be three more annual payments in advance of £ 7,000, payable on 1 October in each year. The vehicles in the lease agreement had a fair value of £ 24,000 at 1 October 2017 and they should be depreciated using the straight line method to a nil residual value. The interest rate implicit in the lease is 10% per year. 3) Other plant and equipment is depreciated at 20% per year by the reducing balance method. All depreciation of property, plant and equipment should be charged to cost of sales. 4) The leashold property has a 25 - year life and is amortised at a straight-line rate. On 30 September 2018 the leasehold property was revlaued to £ 220,000 and the directors wish to incorporate this revaluation in the financial statements. 5) The provision for income tax for the year ended 30 September 2018 has been estimated at £ 18,000. At 30 September 2018 there are taxable temporary differences of 92,000. The rate of income tax on profits is 25% Required: a) Prepare Adjustment Joumals for the period ended 30 Septemebr 2018 b) Prepare Adjusted Trial Balance as on 30 September 2018 c) Prepare a statement of Profit or Loss for the year ended 30 September 2018. d) Balance Sheet as at 30 September 2018 CLIFTON PHARMA LIMITED The following trial balance relates to Clifton Pharma Limited for the financial year ended 30 September 2018, assume you are working as an Accounts Executive in this Company. Dr. Cr. 134,000 35,000 Cost of sales Operating Expenses Loan interest paid (see note 1) Rental of vehicles (see note 2) 1,500 7,000 Revenue 338,300 Investment income 2,000 250,000 Leasehold property at cost (see note 4) Plant and machinery at cost Accumulated depreciation at 1 October 2017: Leashold property Plant and equipment 197,000 40,000 47,000 Investments 94,000 Share capital 280,000 Share premium 20,000 Retained earnings at 1 October 2017 19,300 Loan notes (see note 1) 50,000 Deferred tax balance at 1 October 2017 (see note 5) 20,000 Inventory at 30 September 2018 Trade receivables 23,700 76,400 Trade payables 14,100 Bank 12,100 830,700 830,700 The following information is relevant for the preparation of financial statements for the year ended 30 September 2018: 1) The effective interest rate on the loan notes is 6% per year. A recent review by the finance department of lease contract has reached the conclusion that £ 7,000 was 2) paid: the lease agreement is for a four-year period in total, and there will be three more annual payments in advance of £ 7,000, payable on 1 October in each year. The vehicles in the lease agreement had a fair value of £ 24,000 at 1 October 2017 and they should be depreciated using the straight line method to a nil residual value. The interest rate implicit in the lease is 10% per year. 3) Other plant and equipment is depreciated at 20% per year by the reducing balance method. All depreciation of property, plant and equipment should be charged to cost of sales. 4) The leashold property has a 25 - year life and is amortised at a straight-line rate. On 30 September 2018 the leasehold property was revlaued to £ 220,000 and the directors wish to incorporate this revaluation in the financial statements. 5) The provision for income tax for the year ended 30 September 2018 has been estimated at £ 18,000. At 30 September 2018 there are taxable temporary differences of 92,000. The rate of income tax on profits is 25% Required: a) Prepare Adjustment Joumals for the period ended 30 Septemebr 2018 b) Prepare Adjusted Trial Balance as on 30 September 2018 c) Prepare a statement of Profit or Loss for the year ended 30 September 2018. d) Balance Sheet as at 30 September 2018
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Clifton Pharma Limited Statement of profit or loss For the vear ended 30 September 2018 Revenue Cost ... View the full answer
Related Book For
Fundamentals of corporate finance
ISBN: 978-0470876442
2nd Edition
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
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