The following trial balance has been extracted from the books of Paul Co. as at 31 December 2018 $ $ Equity share capital ( $1) 6,000 Retained earnings at 1 January 2018 6,835 Revenue 76,980 Salary & wages 7,400 Inventory at 1 January 2018 4,930 Purchases 40,760 Distribution cost 6,130 Administrative expenses 6,790 Loan interest 1,200 Investment income 1,250 Tax 1,200 Receivables and payables 10,290 3,360 Bank 4,125 Motor vehicles-cost 6,000 Buildings- cost 13,000 Motor vehicles-accumulated depreciation 1 January 2018 2,000 Buildings- accumulated depreciation 1 January 2018 3,400 Debenture ( 2021) 2,000 101,825 101,825 Additional information: 1. Inventory at the end of the year was valued at $5,000 2. Paul made no additions or disposal of tangible non-current assets in the year. Its depreciation policy is as follows: Motor vehicle – 20% reducing balance Buildings- 25 years’ straight line The depreciation expense for the year is charged to cost of sales 3. Salary and wages are to apportioned equally across cost of sales, distribution cost and administrative expense. 4. An estimated of $2,500 was made for tax payable at year end. Required In accordance with IAS 1, Presentation of Financial Statements and other relevant International Accounting Standards, prepared for publication: a) The statement of profit or loss for year ended 31 December 2018 b) The statement of financial position for year ended 31 December 2018. Show all working
The following
2018
$ $
Equity share capital ( $1) 6,000
Revenue 76,980
Salary & wages 7,400
Inventory at 1 January 2018 4,930
Purchases 40,760
Distribution cost 6,130
Administrative expenses 6,790
Loan interest 1,200
Investment income 1,250
Tax 1,200
Receivables and payables 10,290 3,360
Bank 4,125
Motor vehicles-cost 6,000
Buildings- cost 13,000
Motor vehicles-
Buildings- accumulated depreciation 1 January 2018 3,400
Debenture ( 2021) 2,000
101,825 101,825
Additional information:
1. Inventory at the end of the year was valued at $5,000
2. Paul made no additions or disposal of tangible non-current assets in the year. Its
depreciation policy is as follows:
Motor vehicle – 20% reducing balance
Buildings- 25 years’ straight line
The depreciation expense for the year is charged to cost of sales
3. Salary and wages are to apportioned equally across cost of sales, distribution cost and
administrative expense.
4. An estimated of $2,500 was made for tax payable at year end.
Required
In accordance with IAS 1, Presentation of Financial Statements and other relevant International
Accounting Standards, prepared for publication:
a) The statement of profit or loss for year ended 31 December 2018
b) The
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