Question

Assessment 1 - Part 2 Humbro Ltd Trial Balance as at 31st December 2016 £000 £000 5,500 550 7,500 5,250 1,100 8,000 3,000 1,700 10,000 17,750 4,700 Ordinary Shares of £1 each Ordinary Shares dividend paid Trade Receivables Trade Payables Administration Expenses 10% Debentures Inventory at 1st January 2016 Distribution Costs Purchases Revenue Retained Profit at 1 January 2016 I Land and Buildings at cost Plant and Machinery at cost Fixture and Fittings at cost Commission Received Bank Land and Building (Accumulated Depreciation) Plant and Machinery (Accumulated Depreciation) Fixture and Fittings (Accumulated Depreciation) Investments Intangible Assets: Goodwill Investment Income Profit on disposal of discontinued operations 14,000 5,200 1,125 1,100 1,950 1,400 1,625 800 1.800 800 2,500 100 48,725 48,725

Answer 1

Humbro Ltd. Income Statement for the year ended 31.12.2016 Particulars Revenue Less: Cost of Sold Gross Profit f'000 17,750 11,500 6,250 1,100 Other Income : Commission : Investment Income 2,500 Less: Expenses Distribution Cost Administration Expenses Depreciation Finance expenses Profit Before Tax Tax Expenses Profit after Tax from continuing operation Profit from discontinue operation Total Comprehensive Income 1,650 1,350 680 800 5,370 850 4,520 100 4,620 Working notes: 1) Administration expenses (1100+ 0/s 250) 1,350 £'000 2) Cost of goods sold: Opening Inventory Purchases Closing Inventory Cost of goods sold £'000 3,000 10,000 - 1,500 11,500 3) Disoribution cost (1700 - prepaid 50) 1,650 £'000 £'000 Total 2016 280 1,680 4) Depreciation Land & Building Plant & Machinery Fixtures & furnitures Total Opening 1,400 1,625 800 325 1,950 875 75 680 5)Finance expenses - Interest on debenture o/s (8000 x 10%) 800 £'000 Statement of Change in Equity £'000 Total Equity 10,200 Ordinary Retained Profit 5,500 4,700 Particulars Share Balance at 01.01.2016 Change in Equity Profit after tax Dividend Balance at 31.12.2016 4,620 -550 8,770 4,620 -550 14,270 5,500 (c) Statement of Financial Position as on 31.12.2016 £'000 £'000 Particulars Asset Non Current Assets Plant & Equipment at cost Land & Building at cost Fixtures & Fittings at cost Land & Building (Accumulated Depreciation) Plant & Machinery (Accumulated Depreciation) Fixtures & Fittings (Accumulated Depreciation) Intangible Assets- Goodwill 5,200 14,000 1,125 -1,680 -1,950 -875 800 16,620 Current Assets Bank Trade Receivable Investment Inventory Prepaid Expenses 1,950 7,500 1,800 1,500 50 12,800 Total Assets 29,420 Liability & Equity Capital & Reserve Retained Earning Equity 8,770 5,500 14,270 Non Current Liability 10% Debentures 8,000 Current Liability Trade Payable Corporate Tax Paayable Outstanding expenses Interest Payable 5,250 850 250 800 7,150 Total 29,420