Jun 03, 2017
Prepare the income statement (profit and loss account) for the year ended 29 February 2016
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MARCH 2016
ACCOUNTING II
Instructions to candidates:
A) Time allowed: Three
hours (plus an extra ten minutes’ reading time at the start – do not write
anything during this time)
b) Answer any FIVE questions
c) Questions carry equal marks. Marks for each
question are shown in [ ]
d) Non-programmable calculators are
permitted in this examination
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£
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£
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Turnover
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2,050,000
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Purchases
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1,025,000
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Stock (inventory) (01 03 15)
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165,000
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Postage and stationery
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20,000
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Rent, rates and insurance
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66,000
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Advertising
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125,000
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Heating and lighting
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90,000
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Auditor’s fee
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14,000
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Salaries
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202,000
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Debenture interest
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5,000
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Wages
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141,000
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Creditors (amounts payable)
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124,000
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Provision for doubtful debts
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20,000
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Equipment at cost
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710,000
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Depreciation of equip. (01 03 15)
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110,000
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Debentures (5%)
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200,000
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Ordinary share capital (£1)
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100,000
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Profit and loss a/c bal. (01 03
15)
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160,000
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Debtors (amounts receivable)
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206,000
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Bank balance (overdrawn)
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5,000
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-----------
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-----------
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2,769,000
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2,769,000
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========
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========
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Notes at 29 February 2016:
•Stock (inventory) is valued at £140,000
•Salaries owing amounted to £17,000
•Insurance prepaid amounted to £5,000
•The provision for doubtful debts is to be
reduced to £15,000
•The equipment is to be depreciated by 40% on
written down value
•The directors wish to provide £30,000 for
corporation tax
•The directors have declared an ordinary dividend of 50p per share
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TASKS
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a)
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Prepare the income statement
(profit and loss account) for the year ended 29 February 2016.
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[11]
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b)
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Prepare the position statement
(balance sheet) as at 29 February 2016.
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[9]
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Continued overleaf
2. summarised financial statements of Lewis Ltd
for 2015 and 2016 were as follows:
Lewis Ltd position statements (balance sheets)
as at 28/29 February:
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2015
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2016
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£000
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£000
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£000
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£000
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Fixed assets at cost
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25,000
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40,000
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Depreciation
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(15,000)
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10,000
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(26,000)
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14,000
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Current
assets (non-fixed assets)
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Stock (inventory)
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15,000
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14,000
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Debtors (amounts receivable)
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12,000
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13,000
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Bank
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1,000
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3,000
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--------
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--------
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28,000
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30,000
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Current liabilities
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--------
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--------
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Creditors (amounts payable)
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5,000
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4,000
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