Calculate the closing balance of retained earnings

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Reference no: EM132331580

Question :

The following has been extracted from the trial balances of Treasure Ltd for the last two years:

 

2019
($'000)

2018
($'000)

Sales (all on credit)

5,250

1,500

Cost of goods sold

2,730

780

Doubtful debts expense

525

150

Interest expense

420

120

Salaries

630

180

Depreciation

210

60

Gain on sale of plant

185

30

Cash

3,264

794

Inventory

3,780

1,080

Accounts receivable

5,600

1,600

Allowance for doubtful debts

560

160

Land

3,150

20

Plant

2,100

900

Accumulated depreciation

490

600

Bank overdraft

4,890

140

Accounts payable

4,280

80

Accrued salaries

462

1,200

Long-term ban

2,240

132

Share capital

2,800

640

Dividends paid

190

800

Retained earnings

 

1,442

Additional infonnation:

- plant with a carrying value of $110 000 (original cost $400 000 and accumulated depreciation of 53200,000) was sold during the year.

- new plant and new land were acquired during the year

Required:

(a) Prepare an Income Statement for the year ending 30 June 2019 (usc the space available on page 4)

(b) Calculate the closing balance of retained earnings as at 30 June 2019 (usc the t-account on page 4)

(c) Prepare a Statement of Financial Position as at 30 June 2019, showing comparative information for the prior year (use the space available on page 5)

(d) Prepare a Statement of Cash Flows (and reconciliation of profit to operating cash flows) for the year ending 30 Junc 2019, showing all workings (usc the space available on page 6 for the t-accounts and the space available on pages 7 and 8 for the Statement of Cash Flow and supporting notes)

Reference no: EM132331580

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