You are given the following information: 1. Inventory at 31 December 2022 cost $47,000. Included in...

  

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You are given the following information: 1. Inventory at 31 December 2022 cost $47,000. Included in this inventory are items which cost $1,400 which are now obsolete and are expected to be sold for $200. 2. The land and buildings, at valuation, comprise: land $80,000, buildings $60,000. The land is to be revalued to $250,000. 3. Prepaid insurance at 31 December 2022 is $1,700 while accrued electricity, at that date, is $5,500. 4. An item of plant and machinery, the cost of which had been $5,000 and whose net book value was $2,300, had been sold in the year for $1,000. No accounting entries relating to the disposal have been made in the company's books of account other than in relation to the disposal proceeds. 5. Depreciation on fixed assets is to be charged as follows: freehold land: no depreciation is charged buildings: 1% per annum on a straight-line basis plant & machinery: 30% per annum on a reducing balance basis 6. A bad debt of $3,000 is to be written off. 7. The provision for bad debts is to be revised to 4% of trade receivables. 8. A final dividend of 3c per ordinary share is to be proposed by the directors. 9. The dividend on the cumulative preference shares, due to be paid on 1 January 2023 is to be provided. 10. Corporation Tax of $20,000 on the current year's profits is to be provided. 11. Interest on the debentures due to be paid on 1 January 2023 is to be provided. Required: (a) Prepare an income statement for the year ended 31 December 2022, a statement of financial position at that date, and a statement of movements in equity note for 2022, all in good style, for the directors. (25 marks) Revaluation reserve Retained profits at 1.1.22 Share capital: 200,000 ordinary shares of 10c each : 10,000 8% cumulative $1 preference shares Land and buildings: at valuation Land and buildings: accumulated depreciation Share premium 6% Debenture loan: 2029 Provision for doubtful debts Plant & machinery: cost Plant & machinery: accumulated depreciation Interim dividend paid on ordinary shares Interim dividend paid on preference shares Corporation Tax Debenture interest Inventory at 1.1.22 Trade receivables Bank account Prepaid insurance at 1.1.22 Accrued electricity at 1.1.22 Trade payables Non-current asset disposal proceeds Sales Purchases Wages and salaries Insurance Travel and entertainment Professional fees Electricity Dr S 140,000 320,000 4,000 400 2,200 2,400 35,000 65,000 1,400 Cr S 55,000 26,200 20,000 10,000 18,000 22,000 80,000 1,800 210,000 14,100 6,000 17,000 1,000 930,000 396,000 367,000 13,200 21,000 14,500 29,000 1,411,100 1,411,100 You are given the following information: 1. Inventory at 31 December 2022 cost $47,000. Included in this inventory are items which cost $1,400 which are now obsolete and are expected to be sold for $200. 2. The land and buildings, at valuation, comprise: land $80,000, buildings $60,000. The land is to be revalued to $250,000. 3. Prepaid insurance at 31 December 2022 is $1,700 while accrued electricity, at that date, is $5,500. 4. An item of plant and machinery, the cost of which had been $5,000 and whose net book value was $2,300, had been sold in the year for $1,000. No accounting entries relating to the disposal have been made in the company's books of account other than in relation to the disposal proceeds. 5. Depreciation on fixed assets is to be charged as follows: freehold land: no depreciation is charged buildings: 1% per annum on a straight-line basis plant & machinery: 30% per annum on a reducing balance basis 6. A bad debt of $3,000 is to be written off. 7. The provision for bad debts is to be revised to 4% of trade receivables. 8. A final dividend of 3c per ordinary share is to be proposed by the directors. 9. The dividend on the cumulative preference shares, due to be paid on 1 January 2023 is to be provided. 10. Corporation Tax of $20,000 on the current year's profits is to be provided. 11. Interest on the debentures due to be paid on 1 January 2023 is to be provided. Required: (a) Prepare an income statement for the year ended 31 December 2022, a statement of financial position at that date, and a statement of movements in equity note for 2022, all in good style, for the directors. (25 marks) Revaluation reserve Retained profits at 1.1.22 Share capital: 200,000 ordinary shares of 10c each : 10,000 8% cumulative $1 preference shares Land and buildings: at valuation Land and buildings: accumulated depreciation Share premium 6% Debenture loan: 2029 Provision for doubtful debts Plant & machinery: cost Plant & machinery: accumulated depreciation Interim dividend paid on ordinary shares Interim dividend paid on preference shares Corporation Tax Debenture interest Inventory at 1.1.22 Trade receivables Bank account Prepaid insurance at 1.1.22 Accrued electricity at 1.1.22 Trade payables Non-current asset disposal proceeds Sales Purchases Wages and salaries Insurance Travel and entertainment Professional fees Electricity Dr S 140,000 320,000 4,000 400 2,200 2,400 35,000 65,000 1,400 Cr S 55,000 26,200 20,000 10,000 18,000 22,000 80,000 1,800 210,000 14,100 6,000 17,000 1,000 930,000 396,000 367,000 13,200 21,000 14,500 29,000 1,411,100 1,411,100