Jun 03, 2017 Assignments

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

                                     

 

£

£

Turnover

 

2,050,000

Purchases

1,025,000

 

Stock (inventory) (01 03 15)

165,000

 

Postage and stationery

20,000

 

Rent, rates and insurance

66,000

 

Advertising

125,000

 

Heating and lighting

90,000

 

Auditor’s fee

14,000

 

Salaries

202,000

 

Debenture interest

5,000

 

Wages

141,000

 

Creditors (amounts payable)

 

124,000

Provision for doubtful debts

 

20,000

Equipment at cost

710,000

 

Depreciation of equip. (01 03 15)

 

110,000

Debentures (5%)

 

200,000

Ordinary share capital (£1)

 

100,000

Profit and loss a/c bal. (01 03 15)

 

160,000

Debtors (amounts receivable)

206,000

 

Bank balance (overdrawn)

 

5,000

 

-----------

-----------

 

2,769,000

2,769,000

 

========

========

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

TASKS

 

a)

Prepare the income statement (profit and loss account) for the year ended 29 February 2016.

[11]

b)

Prepare the position statement (balance sheet) as at 29 February 2016.

[9]

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:

 

2015

 

2016

 

 

 

£000

£000

£000

£000

 

Fixed assets at cost

25,000

 

40,000

 

 

Depreciation

(15,000)

10,000

(26,000)

14,000

 

Current assets (non-fixed assets)

 

 

 

 

 

Stock (inventory)

15,000

 

14,000

 

 

Debtors (amounts receivable)

12,000

 

13,000

 

 

Bank

1,000

 

3,000

 

 

 

--------

 

--------

 

 

 

28,000

 

30,000

 

 

Current liabilities

--------

 

--------

 

 

 

 

 

 

 

Creditors (amounts payable)

5,000

 

4,000

 


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