Question

The trial balance of Suzhou Tech Ltd at 31 December 20X9 is given below. Debit £ 000's 258,000 Credit £ 000's 424,600 64,500 12,850 25,850 43,870 8,580 6,890 12,470 4,100 440 Purchases Sales Inventory at 1 January 20X9 Warehouse wages Salespersons' salaries and commission Administrative salaries General administrative expenses General distribution expenses Directors' remuneration Debenture interest paid Dividends - interim dividend paid Property, plant and equipment: - cost - accumulated depreciation, 1 January 20X9 Trade receivables Trade payables Provision for doubtful debts at 1 January 20X9 Balance at bank 10% debentures (repayable in two years later) Called-up share capital (£l equity shares) Share premium account Retained earnings, 1 January 20X9 Suspense account (see note 3 below) 258,000 55,900 98,900 55,800 4,200 15,280 41,000 44,000 17,300 124,720 11,650 794,450 794,450

Answer 1

Credit Debit 1,500,000 Account Title & Explanation Suspense Share Capital (500000*1) Share Premium Account(500000*2) 10,150,000 36,900,000 Suspense Accumulated Depreciation Property,Plant & Equipment Gain on disposal of Plant 500,000 1,000,000 Cost Accumulated Depreciation Book Value 41,000,000 Sale Price 6,050,000 Gain on Disposal 41,000,000 36,900,000 4,100,000 10,150,000 6,050,000 101 a) 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 Suzhou Tech Ltd. Statement of Income For the Year ended 31st December 20X9 424,600,000 Sales Less Cost of Goods Sold Inventory at 1st January 20x9 Purchases Less ending Inventory Cost of Goods Sold Gross Profit 64,500,000 258,000,000 -65,000,000 257,500,000 167,100,000

12,850,000 25,850,000 7,340,000 3,741,000 -6,050,000 15,190,000 64,971,000 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 Operating Expenses Distribution Expenses Warehouse Wages Salesperson's salaries and Commission General Distribution expenses Directors remuneration Gain on disposal of Plant Depreciation on Plant (258000000-41000000)*10%*70% Total Distribution Expenses Adminstrative expenses Adminstrative Salaries General Adminstrative expenses Directors remuneration Bad Debts Add New Provision (98900000 - 8400000)*2% Less Provision for Doubtful Debts at 1 January 20X9 Depreciation on Plant (258000000-41000000) *10%*30% Total Adminstrative Expenses Total Operating Expenses Income Before Interest Other Incomes and (Expenses) Debenture Interest Paid Net Income 43,870,000 9,450,000 8,729,000 8,400,000 1,810,000 -4,200,000 6,510,000 74,569,000 139,540,000 27,560,000 4,100,000 23.460.000

145 146 147 148 Suzhou Tech Ltd. Statement of Retained Earnings As on 31st December 20X9 Retained Earnings, 1st January 20X9 Add Net Income Less Dividend Paid Retained Earnings , 31st December 20X9 124,720,000 149 23,460,000 -2,220,000 150 21,240,000 145,960,000 151 152 153

154 155 156 157 158 15,280,000 159 160 161 98,900,000 -8,400,000 -1,810,000 Suzhou Tech Ltd. Statement of Financial Position As on 31st December 20X9 Assets Balance at Bank Trade Receivables Less Bad debts written off New Provision Inventory Prepaid General Adminstrative expenses Prepaid General Distribution expenses Total Current Assets Property, plant and Equipment Property, plant and Equipment; Cost Less Accumulated Depreciation Total Assets 162 88,690,000 65,000,000 1,270,000 840,000 163 164 171,080,000 165 166 167 217,000,000 -40,700,000 168 176,300,000 347,380,000 169 170

55,800,000 2,140,000 1,290,000 1,780,000 61,010,000 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 Liabilities and Shareholder's Equity Trade Payables Accrued General Adminstrative expenses Accrued General Distribution expenses Dividend Payable Total Current Liabilities Long term Liabilities 10% Debentures Total Liabilities Shareholder's Equity Called-up Share Capital Share Premium Account Retained Earnings Total Liabilities and Shareholder's Equity 41,000,000 102,010,000 44,500,000 18,300,000 145,960,000 208,760,000 310,770,000 Note; As there is difference between the value given above for directors remuneration and the amount given in point balance sheet is not tallied