Reference no: EM131809839
Question - The following are the balances extracted from the financial records of Sita Ltd as at 31 May 2011.
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£OOO
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£OOO
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Building at cost
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642
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|
|
Buildings accumulated depreciation at 1 June 2010
|
48
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Plant at cost
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176
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|
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Plant, accumulated depreciation at 1 June 2010
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|
88
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Land at cost
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188
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|
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Bank balance
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30
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|
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Revenue
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1,510
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|
Purchases
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884
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|
|
Discount received
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|
76
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Return inwards
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28
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|
|
Wages & salaries
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144
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|
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Insurance expenses
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14
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|
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Inventory at 1 June 2010
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128
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|
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Trade Payables
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|
200
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Trade receivables
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256
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|
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Loan notes interest
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4
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|
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Administration Expenses
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64
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Energy expenses
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70
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|
|
Allowance for receivables at
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|
8
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Directors remuneration
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56
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|
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Retained earnings at 1 June 2010
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104
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Dividend paid
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20
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£1 Ordinary shares
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570
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Share premium account
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|
60
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10% loan notes
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|
40
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2,704
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2,704
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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:
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Cost of Sales
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Distribution cost
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Administrative Expenses
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Discount received
|
-
|
-
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100%
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|
Energy expenses
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50%
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20%
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30%
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Insurance expenses
|
-
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50%
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50%
|
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Wages and salaries
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40%
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35%
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25%
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|
Directors' remuneration
|
-
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-
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100%
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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.
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