Reference no: EM132762062
Manufacturing equipment - cost 1800
Manufacturing equipment - Accum. depreciation 540
Share premium 1600
Loan (10% repayable 2025) 1200
Revaluation reserve 200
Vehicles cost 120
Vehicles - Accumulated depreciation 78
Provision for doubtful debts 20
Tax 7
Trade payables 660
Prepayments at 1 Oct. 2019 12 Fixtures - cost 8000
Fixtures - Accumulated depreciation 320
Distribution expense 632
Other incomes 4
Admin expenses 1154 Bank/Cash 33
Share Capital (1 eur par value per 1 share) 3500
Dividend paid 200 Interest paid 60
Inventory at 1st October 2019 610
Retained earnings 974
Sales revenue 12000
Accrued expenses at 1 Oct. 2019 8
Disposal account 10
Purchases 6800
Trade receivables 1700
You are also provided with the following information
1. The loan was issued in Oct. 2019. Interest is payable half-yearly on 1 April and 1 Oct. The interest due on April 2020 was paid on the date due. Accrued interest at Sept. 2020 has not yet been accounted for.
2. The directors decided that a further 100,000 eur of TR should be written of and the provision for doubtful debts should be kept 3% of outstanding balance.
3. Auditors have audited the company and the total expense is estimated to be 80,000 eur.
4. On 13 September 2020, inventory was counted and valued at cost of 780,000. However, included in this inventory is old stock costing 70,000 which could be sold at 60% of its cost.
5. The balance of prepayments at 1st Oct 2019 refers to insurance charges. Prepaid insurance included in general distribution costs at 30 Sept.. 2020 accounted for 14,000 eur.
6. The balance of accrued expenses for 1 Oct. 2019 refers to accrued electricity expense. In the end of Sept. 2020 an electricity bill of 15,000 eur. The company classifies Heat and Light expenses under Admin Expenses.
7. The balance of tax account is the result of an overprovision for the year ended Sept. 2019. The company's tax charge for the year to 30 Sept. 2020 has been estimated at 150,000 eur.
8. Depreciation is still to be calculated for the year on the following basis: Fixtures - 2% per annum straight line Manufacturing equipment - 10% per annum straight line Vehicles - 25% per annum using reducing balance method A full year of depreciation is calculated in the year an asset ie acquired, and none in the year in which it is disposed of.
9. During the year, the vehicle that was purchased in Aug. 2017 for 30,000 euro was sold for 10,000 eur. The NBV of the vehicle was 13,000. No entries have been made in the books for this disposal, apart from recording the disposal proceeds.
Required:
Problem 1: Prepare the Incomes statement for JAN plc. For the year ended 30 Sept. 2020 Also, prepare the Balance Sheet for this date. Show your working clearly.