Question

The Trial balance for Jasmine Ltd for the year ended 30.9.18 is below:

	Debit (£)	Credit (£)
Vehicles	58,250
Tax paid for the year	10,000
Sundry expenses	1,360
Sales		600,000
Salaries	82,500
Reserves		456,600
Rates	16,250
Purchases	110,000
Prepayments	1,300
Plant & Machinery	160,000
Land	800,000
Inventory at 30.9.17	15,000
Interest paid	6,000
Utilities	22,000
Delivery costs	3,640
Cash	19,650
Capital		850,000
Buildings	750,000
Bank overdraft		30,000
Administration costs	14,300
Accumulated depreciation on vehicles at 30.9.17		11,650
Accumulated depreciation on plant & machinery at 30.9.17		16,000
Accumulated depreciation on buildings at 30.9.17		136,000
Accounts receivable	250,000
Accounts payable		120,000
8% Long-term loan		100,000
	2,320,250	2,320,250

The following supplementary information is available which has not been subjected to double entry

17. Closing inventories are £55,000.
18. Utilities includes an overpayment of electricity not yet used of £3500
19. A customer owing £10,700 has become bankrupt and there is no chance of payment. In addition a provision for future doubtful debts of 3% of remaining accounts receivable should be established.
20. An invoice for stationery has been received for £650 but not yet paid. This relates to items acquired in December 2017. Stationery is recorded as part of sundry expenses.
21. The final interest payment for the 8% loan due September 2018 has not yet been paid.
22. Depreciation is charged per annumm on the following basis: Buildings 2% straight-line; Vehicles 20% reducing balance; Plant and Machinery 10% straight-line.

Required: Produce an Income Statement and a Statement of Financial Position for Jasmine Ltd for the yer ended 30.9.18

Answer 1

Annual Income Statement	Calculations	2018
Sales		£ 600,000.00
Cost of Goods Sold:
Opening Inventory	£        15,000.00
Purchases	£      110,000.00
Closing Inventory	£ (55,000.00)
Total Cost of Goods Sold		£    70,000.00
ross Profit		£ 530,000.00
Other Operating Income or Expenses
Sundry Expenses	£          2,010.00
Utility Expenses	£        18,500.00
Delivery cost	£          3,640.00
Salaries	£        82,500.00
Administrative cost	£        14,300.00
Rates	£        16,250.00
Total Operating Expenses		£ 137,200.00
EBITDA		£ 392,800.00
Depreciation on Vehicle	£          9,320.00
Depreciation on Plant	£        16,000.00
Depreciation on building	£        15,000.00
Total Depreciation		£    40,320.00
Bad Debts		£    10,700.00
Provision for Bad Debts		£      7,179.00
EBIT		£ 334,601.00
Interest Expenses		£      8,000.00
EBT		£ 326,601.00
Tax paid		£    10,000.00
Net Income		£ 316,601.00

Annual Balance Sheet	Calculations	2018
Current Assets
Cash On Hand		£        19,650.00
Prepayments		£          1,300.00
Inventory		£        55,000.00
Account Receivables	£    239,300.00
Provision For Bad Debts	£        7,179.00
Net Receivables		£      232,121.00
Prepaid utility Expenses		£          3,500.00
Total Current Assets		£      311,571.00
Fixed Assets
Plant And Machinery	£    160,000.00
Accumulated Depreciation on Plant & Machinery	£    (32,000.00)
Vehicles	£   58,250.00
Accumulated Depreciation on Vehicles	£ (20,970.00)
Land	£    800,000.00
Buildings	£    750,000.00
Accumulated Depreciation on Buildings	£(151,000.00)
Net Fixed Assets		£ 1,564,280.00
Total Assets		£1,875,851.00
Total Current Liabilities
Account Payable		£      120,000.00
Bank Overdraft		£        30,000.00
Sundry Expense Payable		£              650.00
Interest Payable		£          2,000.00
Total Current Liabilities		£      152,650.00
Non-Current Liabilities
8% Lon Term Loan		£      100,000.00
Total Non-Current Liabilities		£      100,000.00
Total Liabilities		£      252,650.00
Shareholder Equity
Capital		£      850,000.00
Reserve		£      456,600.00
Net Income for the year		£      316,601.00
Total Shareholder Equity		£ 1,623,201.00
Total Liabilities And Share Holders Equity		£  1,875,851.00