Question

for 70 points Please Help

1) Lion Ltda. Is a company that publishes and distributes high quality books and texts. The following trial balance has been extracted from the company's books as of June 30, 2019: £ DEBIT £ CREDIT Distribution costs 441,000 Bad debt cancelled (unchargeable) 72,000 Bank 63,000 Accounts Receivable 2,700,000 Provision vehicle depreciation 360,000 Directors' Remuneration 495,000 Heating and Ilumination 252,000 Dividends 36,000 Long Term Investments 252,000 Invested capital 9,517,000 Comercialization expenses 270,000 Retained earnings to July 14 2018 1.188.000 Provision for bad debts 72,000 Purchases 11,160,000 Sales 8,900,000 Inventory to July 1st 2018 1,206,000 Vehicles 720,000 Non operative income from sales of vehicles 6,000 18,855,000 18,855,000 The following additional information is available: 1. Inventory as of June 30, 2019 amounted to £ 1,395,000 at cost. 2. The proceeds from the disposal of vehicles of £6,000 (Vehicle Disposal Proceeds), on the trial balance relates to the sale of the car by the CFO on July 1, 2018. This car had been purchased for £ 20,000 on July 1, 2017 The linear base will be used to make the depreciation of vehicles at 25%. You can assume that residual values are considered intangible for all fixed assets. 3. The provision for doubtful/bad debts must be adjusted to 5% of trade debtors pending as of June 30, 2019.

Answer 1

Income Statement of Lion Ltda.
FOR THE YEAR ENDED 30 JUNE 2019
ACCOUNT HEAD	DEBIT (RM)	ACCOUNT HEAD	CREDIT(RM)
DISTRIBUTION COST	441000	SALES	8900000
DIRECTOR REMUNERATION	495000	CLOSING INVENTORY	1395000
HEATING & ILUMINATION	252000	SALE OF VEHCILE	6000
COMMERICALIZATION EXPENSES	270000	NET LOSS	3595000
PURCHASES	11160000
OPENING INVENTORY	1206000
DEPRECIATION	5000
PROVISION FOR BAD DEBTS	63000
LOSS ON SALE OF VEHICLE	4000
	13896000		13896000

STATEMENT OF FINANCIAL POSITIONS
AS ON 30 JUNE 2019
CAPITAL & LIABILITIES		AMOUNT	ASSETS		AMOUNT
CAPITAL	9517000		VEHCILES	720000
LESS: NET LOSS	3595000	5922000	LESS : DEPRECIATION	360000	360000
			CLSOING INVENTORY		1395000
PROVISION FOR BAD DEBTS		135000
			ACCOUNT RECEIVABLES(BALANCE+ BAD DEBTS CANCELLED + NEW PROVISONS)		2835000
			RETAINED EARNINGS	1188000
			LESS: DIVIDEND PAID	36000	1152000
			LONG TERM INVESTMENTS		252000
			BANK		63000
TOTAL		6057000	TOTAL		6057000