McKie Ltd has presented you with the following balances for the year ended September 30, 2023:

	$		$
Creditors			22,500
Sales Revenue			1,143,700
Land at cost	550,000
Building at cost	570,000
Furniture and fittings at cost	85,000
Bank			14,000
Provision for Depreciation
Buildings			120,000
Furniture and fittings			15,000
Discounts	5,700		5,800
Retained Earnings at 1 Oct 2022	14,800
Provision for bad debts			2,200
Goodwill	400,000
Cash	16,400
Inventory at 1 Oct 2022	48,000
Rent Received(from Breezy Ltd)			27,000
Rent	7,900
Wages and Salaries	122,000
Insurance	16,300
Carriage Inwards	2,300
Returns	8,500		12,000
Commission received			5,200
8% Mortgage			100,000
Other Operating Expenses	2,500
Debtors	45,000
Purchases	340,000
Debenture Interest	1,200
Mortgage Interest	4,600
Bad debt	4,700
7% Debentures			150,000
4% Preference Shares @ $0.5			130,000
Ordinary Shares @ $0.75			375,000
General Reserves			127,000
Interim ordinary dividends paid	4,500
	2,249,400		2,249,400

The following additional information is available:

1. At September 30, 2023 closing inventory was $32,000

2. The Accountant has determined that the estimate for the provision for bad debts at September 30, 2023 is 10% of debtors.

3. At the end of the period it was discovered that one employee was owed $2,000 in salaries while another was overpaid by $4,000. Additionally insurance prepaid was $300

4. The following appropriation of the expenses must be made

Admin Selling & Dist

Rent 80% 20%

Wages & Salaries 60% 40%

Insurance 50% 50%

Prov. for Depreciation 70% 30%

5. On June 1, 2023 the company rented some of its office space to Breezy Ltd. At that date Breezy Ltd paid rent covering the next nine months.

6. Depreciation should be provided as follows:

Land Nil

Buildings 2 percent per year on cost

Furniture & Fittings 20 percent per year on reducing balance

7. Goodwill impairment was estimated to be 20%.

8. Corporation tax is estimated to be $42,000

9. The directors proposed on September 20, 2023 to pay the final preference dividends.

At a board of directors meeting on October 19, 2023 the directors evaluated the performance of the business over the past financial year and proposed to pay a further 6% ordinary dividend.

Required:

1. Prepare the following for McKie Ltd for the financial year ending September 30, 2023:
2. Statement of Profit or Loss (20 marks)
3. Statement of changes in equity (8 marks)

Statement of Financial Position. (12 marks

Answer rating: 100% (QA)

To prepare the required financial statements for McKie Ltd for the financial year ending September 30 2023 we need to consider the given balances and ... View the full answer