Financial Statements of Limited Companies

1 Osborne Books Tutor ZoneFinancialStatements ofLimitedCompaniesPractice assessment 3 Osborne Books Limited , 2016 Important note to tutorsIn order to provide further practice in the type of questions that may have to be answered in theAssessment there are alternative questions for Tasks 1 & 2 and Task 6 provided at the end of Statements of Limited Companies tutor zoneTasks 1 and 2 You have been asked to help prepare the Financial Statements of Kyle plc for the year ended 31 March 20-1. The company s trial balance as at 31 March 20-1 is shown below. Kyle plcTrial balance as at 31 March 20-1 Debit Credit 000 000 Share capital 70,000 Share premium 10,000 Revaluation reserve 15,000 Trade and other payables 9,372 Land & buildings cost 95,500 Land & buildings accumulated depreciation 11,640 Plant & equipment cost 50,000 Plant & equipment accumulated depreciation 24,400 Trade and other receivables27.

2 238 Accruals 1,450 Prepayments2,220 7% bank loan repayable 20-9 30,000 Cash at bank15,801 Retained earnings 7,580 Interest paid1,750 Sales 152,473 Purchases 73,899 Distribution costs23,922 Administrative expenses 21,056 Carriage in2,340 Inventories as at 1 April 20-0 15,559 Tax 220 Dividends paid2,850 332,135 332,135practice assessment 3 3 Further information The inventories at the close of business on 31 March 20-1 cost 9,197,000.

3 On 11 April 20-1,goods included in this total at a value of 740,000 were found to be damaged and were sold for 590,000. Carriage inwards of 460,000 owing at 31 March 20-1 is to be provided for. At the end of the year the company carried out an impairment test on machinery which had acarrying amount of 12,500,000. At present it could be sold for 13,000,000 and would incurdisposal costs of 1,400,000. The company estimate that the machine will generate cash flows witha net present value of 11,900,000 over the remainder of its useful life. No adjustment has beenmade in respect of the impairment test.

4 Any impairment losses are apportioned equally betweendistribution costs and administration expenses. Land, which is non-depreciable, is included in the trial balance at a value of 34,200,000. This isto be revalued at 38,000,000 and this revaluation is to be included in the Financial Statements forthe year ended 31 March 20-1. Interest on the bank loan for the last two months of the year has not been included in the accountsin the trial balance. The corporation tax balance of 220,000 included in the trial balance was the result of an over-estimate of the tax liability for the previous year.

5 The corporation tax charge in respect of thecurrent year to 31 March 20-1 is estimated as 4,427,000. All the operations are continuing (a)Draft the statement of profit or loss and other comprehensive income for Kyle plc for the year ended31 March 20-1.(b)Draft the statement of changes in equity for Kyle plc for the year ended 31 March 20-1.(c)Draft the statement of Financial position for Kyle plc as at 31 March plcStatement of profit or loss and other comprehensive income for the year ended 31 March 20-1 Continuing operations 000 Revenue Cost of sales

6 Gross profit Distribution costs Administration expenses Profit from operations Finance costs Profit before tax Tax Profit for the period from continuing operations

7 Other comprehensive income for the year Total comprehensive income for the year 4financial Statements of Limited Companies tutor zoneKyle plcStatement of changes in equity for the year ended 31 March 20-1 Share Share Revaluation Retained Total capital premium earnings equity 000 000 000 000 000 Balance at 1 April 20-0 Changes in equity for the year Total comprehensive income

8 Dividends Balance at 31 March 20-1 Kyle plcStatement of Financial position as at 31 March 20-1 000 Assets Non-current assets Current assets

9 Total assets Equity and liabilities Equity

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