Prepare the financial statement for sita ltd

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Reference no: EM131809839

Question - The following are the balances extracted from the financial records of Sita Ltd as at 31 May 2011.


£OOO

£OOO

Building at cost

642


Buildings accumulated depreciation at 1 June 2010

48

Plant at cost

176


Plant, accumulated depreciation at 1 June 2010


88

Land at cost

188


Bank balance

30


Revenue


1,510

Purchases

884


Discount received


76

Return inwards

28


Wages & salaries

144


Insurance expenses

14


Inventory at 1 June 2010

128


Trade Payables


200

Trade receivables

256


Loan notes interest

4


Administration Expenses

64


Energy expenses

70


Allowance for receivables at


8

Directors remuneration

56


Retained earnings at 1 June 2010


104

Dividend paid

20


£1 Ordinary shares


570

Share premium account


60

10% loan notes


40


2,704

2,704

Additional information as at 31 May 2011:

1. Closing inventory at 31 May 2011 has been valued at £60,000.

2. Energy expenses of £13,000 for May 2011 have not been invoiced or recorded.

3. Insurance expenses include £4000 for June and July 2011.

4. The allowance for receivables is to be increased to 5% of trade receivables and the increase is to be allocated to administrative expenses.

5. Plant is depreciated at 25% per annum using reducing balance method. The entire amount should be allocated to cost of sales.

6. Building are depreciated at 5% per annum on their original cost, allocated 50% to cost of sales, 30% to distribution cost and 20% to administrative expenses.

7. Income tax of £40,000 is to be provided for the year.

8. The expenses listed below should be apportioned as indicated:


Cost of Sales

Distribution cost

Administrative Expenses

Discount received

-

-

100%

Energy expenses

50%

20%

30%

Insurance expenses

-

50%

50%

Wages and salaries

40%

35%

25%

Directors' remuneration

-

-

100%

Required: Prepare the following financial statement for Sita Ltd in accordance with IAS 1, Presentation of financial statements:

1. Income statement for the year ended 31 May 2011.

2. Statement of financial position as at 31 May 2011.

Reference no: EM131809839

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