Prepare the profit and loss account and balance sheet, Financial Accounting

Assignment Help:

MarmadukeMuffett once had a girlfriend who ran an antiques business in London'sKings Road. Ever since then, he has been hooked on the furniture trade and now runsMarmaduke'sMarvellous Mart, a furniture emporium in Riming-on-Sea specialising inantique and 'feature' furniture especially appealing to the tourists who frequent the resortin the summer months. He buys considerable stock from his cousin Albert's 'Spiderman'workshop - and indeed has invested £70,000 in Albert's company this year.

His bookkeeper has written up the books, extracted the trial balance and sent it togetherwith the additional information to George King FCCA, the accountant who acts forMarmaduke (as well as his cousin Albert) with a request to draw up the accounts quicklysince Marmaduke has made an appointment next week to see Roy Scot, his bankmanager, to review the overdraft limit.him out by preparing Marmaduke's profit and loss account for the year ended February28, 19X8 and his balance sheet on that day. George warns you that occasionallyMarmaduke's bookkeeper gets the trial balance a bit mixed up and to be careful aboutchecking it out.

George is, as usual, rushed off his feet, together with all his staff, and asks you to help

MARMADUKE'S MARVELLOUS MART: TRIAL BALANCE

at February 28, 19X8




Assets and
Expenses

Liabilities, Capital
and Income


£

£

Trade debtors

16,000


Trade creditors


18,000

Purchases

65,000


Invoiced sales


174,000

Opening stock at 1/3/X7


21,000

Loans from directors - repayable 28/2/Y3

27,000


Bank overdraft

28,000


Equipment and furnishings (cost)

25,000


Premises (cost)

100,000


Accumulated depn on equipment at 1/3/X7


15,000

Motor vehicles (cost)


34,000

Accumulated depn on vehicles at 1/3/X7

14,000


Share capital

70,000


Investment in Albert Muffett Limited


70,000

Directors' salaries

20,000


Shop salaries


12,000

Administration expense

6,000


Promotion expense

21,000


Interest paid to bank


2,000

Profit and loss account 1/3/X7


46,000

£ 392,000


£392,000

Additional information

  • Stock on hand at February 28, 19X8 is valued at cost £28,000.
  • Depreciation on equipment for 19X8 is calculated at 20% on cost per annum.
  • Depreciation on motor vehicles is calculated at 25% of net book value (cost less depreciation) per annum.
  • Accruals for administration expense - telephone, stationery and electricity - are estimated at £2,000.
  • Administration expense includes £1,500 for insurance paid a year in advance on November 1, 19X7.
  • Provide for tax at 25% of net profit.
  • Provide a final dividend of £5,000.

You are required to:

a.   list the adjustments needed to correct the trial balance.

b.   prepare the profit and loss account and balance sheet in appropriate format for publication


Related Discussions:- Prepare the profit and loss account and balance sheet

Journalize the transactions, During it's first year of operations, Rosa Cor...

During it's first year of operations, Rosa Corp has these transactions pertaining to its common stock. Jan. 10 Issued 30,000 shares for cash at $5 per share July 1 Issued 60,000 sh

Which product should harper tell its sales personnel, Harper Co. provided t...

Harper Co. provided the following information concerning two products: contribution margin per unit- product 12 $46 Contribution margin per unit-product 43 $30. Machine hours requi

Journal entries to record transactions in the general fund, A village orde...

A village ordered supplies for its Fire Department at an estimated cost of $16,700. The supplies were received with an invoice for $16,800. The village accepted the shipment and th

Illustration of balance sheet, Normal 0 false false false ...

Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4

Calculate the intrest rate and discount rate, You are considering whether o...

You are considering whether or not to go to graduate school. Well... there are many things to consider, of course, such as the type of job you would thus get, the opportunity to li

Bond Valuation, FV of Bond 20000, CR 0.045, MR 0.059, Remaining payments 32...

FV of Bond 20000, CR 0.045, MR 0.059, Remaining payments 32. Answer

Franchise, gershwin coporation obtained afranchise fron sonic hedgeehog inc...

gershwin coporation obtained afranchise fron sonic hedgeehog inc .for a cash payment of $ 120000 on april 1,2010 . the franchise grants gershwin the right to sell certain product a

State the relationship between return and risk, State the relationship betw...

State the relationship between return and risk This relationship between return and risk has significant implications for setting financial objectives for a business. Owners wil

Ppe, WHAT IS PPE?

WHAT IS PPE?

Extent of tests of control, Extent of Tests of Control -Every year AUDITOR ...

Extent of Tests of Control -Every year AUDITOR should obtain sufficient evidence about whether company's internal control over financial reporting, including controls for all inter

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd