Q) The following trial balance has been extracted from the books of accounts of XYZ Limited:
Dr Cr
Rs Rs
Office staff salaries 180,340
Rent 200,000
Power costs 140,000
Carriage outwards 310,375
Issued, subscribed and paid-up capital 450,000
Share Premium 90,000
Trade receivables 365,000
Cash 175,530
Bank 60,745
License fee 32,000
Provision for doubtful debts 38,500
Deferred taxation 80,000
Debentures 200,000
Investments in associates 250,000
Interest income 50,000
Development costs 60,000
Trade marks 130,000
Buildings at cost 600,000
Accumulated depreciation (at 1 January 2018) 250,000
Delivery vans at cost 350,000
Accumulated depreciation 150,000
Retained earnings (at 1 January 2018) 119,950
Purchases 880,800
Inventory (at 1 January 2018) 135,120
Trade payables 240,470
Sales 2,175,500
Research costs
3,937,165
Additional information:
(1) Inventory at 31 December 2018 was valued at Rs. 110,515.
(2) The income tax charge based on the profits on ordinary activities is estimated to be Rs. 80,000.
(3) The provision for doubtful debts is estimated to be 10% of receivables at the year end.
(4) Buildings are depreciated at 15% on cost whereas delivery vans are depreciated at 20% using the reducing balance method.
(5) The annual interest payable on debentures is 7% of their value.
(6) The sales revenue received includes Rs. 30,000 for goods to be supplied in January 2019.
(7) The rent paid during the year is divided equally between administrative and distribution; whereas power costs are apportioned between administrative expenses and distribution costs in the ratio of 2 : 3.
(8) During the year, deductible temporary difference arose which resulted in deferred tax asset of Rs. 10,000.
Required
Prepare the company’s profit and loss account for the year ended 31 December 2018 and a statement of financial position as at that date in accordance with IAS-1.
Answers
Answer:
Explanation:
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