Prepare a statement of financial position

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Reference no: EM133043775

BA4008QA Business Decision Making - London Metropolitan University

Task 1

You are provided below the Trial Balance of London Ventures for the year ended 31 March 2021.

London Ventures has been trading for a number of years as a wine merchant. The following list of balances has been extracted from his ledger as at 31 March 2021, the end of his most recent financial year.

	DR	CR
	£	£
Delivery Costs	10,000
Capital		160,600
Salaries and Wages	41,263
Cash in Hand	950
Inventories at 1 April 2020	13,310
Trade Receivables	31,099
Fixtures & Fittings at cost	153,227
Accumulated Depreciation Fixtures & Fittings at 1 April 2020		66,710
Motor Vehicles at cost	172,600
Accumulated Depreciation Motor Vehicles at 1 April 2020		83,500
Bank Overdraft	.............	17,900
Advertising	5,478
Insurance	9,306
Trade Payables		31,379
Purchases	152,300
Drawings	31,288
Rent and Rates	18,612
Sales		290,357
Heat and Light	11,013
Total	650,446	650,446

The following additional information is available as at 31 March 2021:
(a) Inventories at the close of business on 31 March 2021 was valued at £20,550
(b) Insurances have been prepaid by £850
(c) Heating and Lighting is accrued by £1,100
(d) Rates have been prepaid by £2,482
(e) Delivery cost is accrued by £905
(f) Depreciation charge for Fixtures and Fittings for the year £11,584.
(g) Depreciation charge for Motor Vehicles for the year £9,440.

You are required to:

Problem 1a
Prepare an Income Statement for the year ended 31 March 2021 for London Ventures

Problem 1b
Prepare a Statement of Financial Position as at 31 March 2021 for London Ventures.

Problem 2
Identify 3 possible limitations of the Income Statement for London Ventures

Problem 3
Identify 3 possible limitations of the Statement of financial position for Ventures.

Problem 4
Explain how London Ltd can effectively manage the following:
a) Inventory Days
b) Trade Payable Days
c) Trade receivable Days

Note: Harvard referencing format

Reference no: EM133043775

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