UESTION 1 Wardour Street Ltd is a dealer in marquees, which are sold to retailer

Question

UESTION 1 Wardour Street Ltd is a dealer in marquees, which are sold to retailers. The Statement of Financial Position for 2014 is as follows: Statement of financial position as at December 31, 2014 2014 ASSETS Non-current assets Property, Current assets Inventories Trade receivables Prepaid rent Cash plant and equipment 687,000 236,000 146,000 10,000 4,000 396,000 Total assets EQUITY AND LIABILITIES Equity Ordinary share capital (£1, fully paid) Share premium Retained earnings 300,000 372,000 295,000 67,000 Current liabilities Trade payables Accrued wages 106,000 10,000 116,000 1,083,000 Total equity and liabilities Property, plant and equipment have an original cost of £913,000 and associated accumulated depreciation of £226,000.

Explanation / Answer

SOLUTION:- INCOME STATEMENT FOR THE YEAR ENDED DEC 31,2015

1300000

closing stock

( 236000+850000-810000)

wages :120000

less: accrued wages(10000)

rent 45000

+ prepaid of last year 10000

- prepaid of next year 15000

STATEMENT OF FINANCIAL POSITION:-

equity and liabilities

ordinary share capital ( 1 each , fully paid up) 300000

add: new shares 50000*1 = 50000

350000

expenditure amount income amount to opening stock 236000 sales

1300000

to purchases 850000

closing stock

( 236000+850000-810000)

276000

wages :120000

less: accrued wages(10000)

110000 to gross profits 380000 total 1576000 total 1576000 depreciation 90000 gross profits 380000

rent 45000

+ prepaid of last year 10000

- prepaid of next year 15000

40000 net profits 250000 total 380000 total 380000

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