Question

36.11 A The following information concerns Hurmey plc in relation to its year ended 31 July 2020:

Additional information:

(i) The inventory was counted at 31 July 2020 and was valued at a cost of \(£ 53,661\).

(ii) Depreciation needs to be charged at the following rates per year:

Premises: \(\quad\) (straight-line) \(\quad 2 \%\) Machinery: \(\quad\) (straight-line) \(\quad 20 \%\) Vans: \(\quad\) (reducing balance) \(\quad 30 \%\)

(iii) The amount shown for rent on the trial balance includes a payment of \(£ 8,100\) which represents twelve months' rent to 30 November 2020 .

(iv) Utilities charges incurred for which no invoices have yet been received amount to a total of \(\mathrm{f} 6,757\)

(v) The audit fee has been agreed at \(£ 18,000\) and this needs to be provided for.

(vi) The allowance for doubtful debts is to be set at \(5 \%\) of accounts receivable.

(vii) The interest on the loan notes is paid in two instalments each year, and the second instalment needs to be accrued.

(viii) The corporation tax charge on this year's profit is estimated to be \(£ 33,000\).

(ix) The directors want to transfer \(£ 8,000\) to general reserve.

Required:

An income statement for the year ended 31 July 2020 and a balance sheet as at that date, both in an internal use format (not for publication).

Answer 1