Sofia Veron owns a business called Greenwell LTD. The following Trial Balance was prepared from the...

 

 

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Sofia Veron owns a business called Greenwell LTD. The following Trial Balance was prepared from the accounting books. Greenwell LTD Trial Balance as at 31 July 2021 Capital as at 1 August 2020 Long-term Loan Interest expense Drawings Trade payables (Creditors) Trade receivables (Debtors) Allowance (Provision) for bad and doubtful debts Inventory (Stock) as at 1 August 2020 Bank Plant and machinery at cost Accumulated (Provision for) Depreciation for Plant and machinery Motor vehicles at cost Accumulated (Provision for) Depreciation for Motor vehicles Electricity Rent Wages and Salaries Bad debts Discounts received Carriage inwards Purchases Sales Returns inwards (Sales returns) Returns outwards (Purchases returns) TOTAL Debit £ 3,000 12,010 81,900 22,000 276,474 250,000 168,000 28,090 54,300 37,477 3,154 1,800 130,745 5,000 1,073.950 Credit £ 320,326 100,000 47,130 1,200 75,000 31,500 6,275 489,504 3,015 1.073,950 Additional information as at 31 July 2021: 1. Inventory (Stock) as at 31 July 2021 was £26,650. 2. Wages and salaries accrued were £7,769. 3. Electricity prepaid was £780. 4. Depreciation is to be provided for the financial year as follows: a) Plant and machinery - 10% using the straight-line method. b) Motor vehicles - 25% using the reducing balance method. 5. The Allowance (Provision) for bad and doubtful debts is to be maintained at 5% of Trade Receivables (Debtors) 6. The business received commission of £4,500 by cash on the 31th of July. This was not recorded in the respective ledger accounts. Required: a) Prepare the Income Statement for the year ended 31 July 2021. b) Prepare the Statement of Financial Position (Balance Sheet) as at 31 July 2021. c) List three (3) users of financial accounting information and explain why they would be a user. (16 marks) (14 marks) (3 marks) Sofia Veron owns a business called Greenwell LTD. The following Trial Balance was prepared from the accounting books. Greenwell LTD Trial Balance as at 31 July 2021 Capital as at 1 August 2020 Long-term Loan Interest expense Drawings Trade payables (Creditors) Trade receivables (Debtors) Allowance (Provision) for bad and doubtful debts Inventory (Stock) as at 1 August 2020 Bank Plant and machinery at cost Accumulated (Provision for) Depreciation for Plant and machinery Motor vehicles at cost Accumulated (Provision for) Depreciation for Motor vehicles Electricity Rent Wages and Salaries Bad debts Discounts received Carriage inwards Purchases Sales Returns inwards (Sales returns) Returns outwards (Purchases returns) TOTAL Debit £ 3,000 12,010 81,900 22,000 276,474 250,000 168,000 28,090 54,300 37,477 3,154 1,800 130,745 5,000 1,073.950 Credit £ 320,326 100,000 47,130 1,200 75,000 31,500 6,275 489,504 3,015 1.073,950 Additional information as at 31 July 2021: 1. Inventory (Stock) as at 31 July 2021 was £26,650. 2. Wages and salaries accrued were £7,769. 3. Electricity prepaid was £780. 4. Depreciation is to be provided for the financial year as follows: a) Plant and machinery - 10% using the straight-line method. b) Motor vehicles - 25% using the reducing balance method. 5. The Allowance (Provision) for bad and doubtful debts is to be maintained at 5% of Trade Receivables (Debtors) 6. The business received commission of £4,500 by cash on the 31th of July. This was not recorded in the respective ledger accounts. Required: a) Prepare the Income Statement for the year ended 31 July 2021. b) Prepare the Statement of Financial Position (Balance Sheet) as at 31 July 2021. c) List three (3) users of financial accounting information and explain why they would be a user. (16 marks) (14 marks) (3 marks)

Answer rating: 100% (QA)

a Prepare the Income Statement for the year ended 31 July 2021 The income statement is shown below Income Statement For the year ended 31 July 2021 Re... View the full answer