Question

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

Part 8 Partnership Dr Cr Trial balance as at 28 February 2020 (continued): 22,600 24,310 General reserve Bad debt expense Share premium Allowance for doubtful debts at 1 March 2019 Issued ordinary share capital Rent received Directors' remuneration 46,000 4,093 62,000 7,070 78,890 188,575 1,727 499 1,727,499 Retained profits at 1 March 2019 Additional information: The inventory was counted at 28 February 2020 and was valued at a cost of £44,201. Depreciation is to be charged at the following annual rates: Plant & equipment: Motor vehicles: 15% (reducing balance) (straight-line) (ii) The amount shown for rent on the trial balance includes a payment of £6,120 which represents (iv) Motor expenses incurred for which no invoices have yet been received amount to a total of (i) 20% twelve months' rent to 31 October 2020. (v) The allowance for doubtful debts is to be changed to 5 % of accounts receivable (vi) The loan note interest is paid in two annual instalments and the second instalment needs to be E5.661. vin) The corporation tax charge on the profit for the year is estimated to be £40,000. (viii) The directors wish to transfer £7,000 to general reserve. provided for. Required: Prepare an income statement for the year ended 28 February 2020 as well as a balance sheet as at that date. Both statements should adopt an 'internal use' format. 36.11A The following information concerns Hurmey plc in relation to its year ended 31 July 2020: Dr Cr Trial balance as at 31 July 2020: 53,010 113,856 Inventory as at 1 August 2019 Wages & salaries Accounts payable 85,810 2,928 Returns outwards 19,757 20,479 523,735 105,600 Rent Utilities Purchases Accounts receivable Sales Machinery: 1,138,555 465,840 278,580 at cost Vans: at cost 105,120 63,900 accumulated depreciation at 1 August 2019 accumulated depreciation at 1 August 2019 Machinery: Vans: Dividends paid 51,440 2,435 Cash at bank 7% loan notes 2025-2027 Loan note interest paid General reserve Bad debt expense Share premium 175,000 6,125 34,100 25,174 77,000 6

Answer 1

MASTER DATA.xlsx - Microsoft Excel Formulas Data Review View Acrobat 96.EA- Home Insert Page Layout * Cut Calibri La Copy i BI U - Clipboard 020 HURMEY PLC - 11 - A A - > A Autosum = = ET = E Wrap Text E Merge & Center General % *- Insert Delete Format aste , Conditional Format Formatting as Table Styles Cell Styles A7 D Sort & Find & Filter - Select Editing 2 Clear Font Alignment Number Cells F G H I K L M N O P Q R S T T U V W X Y Z AA AB AC AD Trading and Profit & Loss Account for year ended 31 July 2020 5 Particulars Amount Amount Particulars Amount Amount 7 Opening Inventory 1 11,38,555 53.010 Sales Less: Return Inwards 11,38,555 9 10 Purchases Lege: Return outwards 5,23,735 2.928 5.20.807 Closing Inventory 53.661 12 13 Working of Prepaid rent Rent 8100 12 months 1 month rent 675 Till Noy 2020 2700 Prepaid for 4 months Gross Profit of 6,10.399 11,92.216 1.82.216 Working of unpaid Loan interest 1.13.856 Gross Profit bif Commission received 17.057 1 Allowance for Doubtful debts op 1.958 15 Expenses 16 17 Wages and palaries 18 Rent 19 Less: Prepaid Rant 20 Utilities 21 Add: Provision for Unpaid not received bill: 22 Loan note interato paid 23 Add: Interest payable 24 Bad debt expeses 25 Allowance for Doubt full Debt Loan interest per year 50% is pending Balance payable 1750007 12250/2= 19,757 2.700 20,479 6,757 6,125 6,125 1 2250 6125 O 27,236 6125 12.250 25,174 5.280 13,172 27 Dempreciation on 28 Premises 29 Machinery 30 Vans 31 Audit Fees 64.404 1,70,744 18.000 33 Net Profit Before Tax and appropriations 34 2.40.397 6.30.594 35 240.997 36 Corporation Tax 37 Dividend Paid 38 Directora Remuneration 39 Transfere to general reserve 33.000 Net Profit Before Tax 51.440 91,080 8.000 41 Net Profit carried to Retained Earning 57.477 2,40.9971 Sheet1 return 6 Balance Sheet as on 31 July 2020 Sheets ► Ready BOO 55% + 13:00 24/11/2019

MASTER DATA.xlsx - Microsoft Excel View Acrobat 96.EA- Home Insert Page Layout Formulas Data Review Cut Calibri - 11 - A A = = = Format Painter BI U DA Clipboard Font General *- Autosum Eg Copy Wrap Text 1 Merge & Center - Paste Conditional Format Formatting as Table Styles Cell Styles Insert Delete Format A7 D Sort & Find & Filter - Select Editing 2 Clear Alignment Number Cells N54 E F G H I J K L M N O P Q R S T 45 Balance Sheet as on 31 July 2020 Amount Amount Assets 47 Liabilities and Equities Amount Amount 48 2,67,552 | (465840 20%) 49 Equities 50 51 Ordinary Shares of 50p each 52 General Reserve 53 Add: Transfer received 54 Share premium 55 56 4% preference shares of £1each 34,100 8,000 Eixed Assets I Machinery 67,000 Less: Accumulated Depreciation Less: Current year Depreciation 42,100 Vans 77,000 Less: Accumulated Depreciation Less: Current year Depreciation 54.000 Premises Less: Accumulated Depreciation Less: Current year Depreciation 4,86,344 Current Assets 4,65,840 1,05,120 93,168 2,78,580 63,900 64,404 6,58,600 1,71,236 13,172 1,50,276 (278580-63900)"30% 4,74,192 (658600'22) 4,28,867 57,477 58 Retained Profits 59 Add: Current years Net earnings 60 61 Liabilities 62 1,05,600 5,280 1,00,320 Accounts Receivable 85,810 Less: Allowance for Doubtful Debts 1,75,000 6,757 Cash at Bank 18,000 6,125 Closing Inventory 33,000 Prepaid Rent 63 Accounts payables 64 7% Loan notes 65 Unpaidinot received Utilities bills 66 Audit Fees payable 67 Interest payable on loan 68 Corporation tax payable 69 70 2,435 53,661 2,700 10,51, 136 10,51,136 72 78 79 80 ► Ready Sheet1 return 6 Sheets BD 70% 0+ 13:02 24/11/2019