Prepare a statement of comprehensive income for the year ended 31 December 20X7 and a statement of financial position at that date, which comply, as far as the information allows, with relevant international financial reporting standards.
The following list of balances was extracted from the books of Crompton plc on 31 December 20X7:
Sales 2,640,300
Administration expenses 220,280
Selling and distribution costs 216,320
Interest paid on loan stock 10,000
Dividends received 2,100
Profit on sale of premises(see note 6) 40,000
Purchases 2,089,600
Inventories at 1 January 20X7 318,500
Bank 11,860
Trade receivables 415,800
Allowance for doubtful debts at 1 January 20X7 10,074
Loss on sale of business operation(see note 6) 8,800
Trade payables 428,250
Corporation tax paid 32,500
10% loan stock 200,000
Investments in other listed companies 20,000
Office equipment 110,060
Vehicles 235,000
Equity share capital($1 shares) 200,000
3,676,860 3,676,860
The following information needs to be dealt with before the financial statements can be finalised:
1. Provide for the loan stock interest which is due for payment on 1 January 20X8
2. Provide for administration expenses paid in advance at 31 December 20X7 0f $12,200 and distribution costs of $21,300 owing at this date
3. The provision for doubtful debts is to be maintained at 3% of receivables
4. Inventories are valued at 31 December 20X7 at $340,600
5. The total corporation tax payable on the company's profits for 20X7 is estimated at $45,700
6. During the year, the company sold a material business operation with all activities ceasing on 28 Febuary 20X8. The premises were sold separately, and gave a profit on sale of $40,000. The loss on sale of the remainder of the operation amounted to $8,800.
The operating results of the business segment were as follows(these figures are included in the relevant
Sales 180,634
Cost of sales 153,539
Administration expenses 20,240
Distribution costs 22,823
Corporation tax effect 3,500 reduction
7. In addition, the company is negotiating the sale of another business sector, which should be completed by 30 April 20X8. Relevant values of the assets of this sector at 31 December 20X7 are as follows:
Book value Fair value less costs to sell
Vehicles 43,554 20,000
Office equipment 16,566 5,000
Inventories 66,000 68,000
Prepare a statement of comprehensive income for the year ended 31 December 20X7 and a statement of financial position at that date, which comply, as far as the information allows, with relevant international financial reporting standards.
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