Question - The following are the balances extracted from the financial records of Sita Ltd as at 31 May 2011.
|
£OOO
|
£OOO
|
|
Building at cost
|
642
|
|
|
Buildings accumulated depreciation at 1 June 2010
|
48
|
|
Plant at cost
|
176
|
|
|
Plant, accumulated depreciation at 1 June 2010
|
|
88
|
|
Land at cost
|
188
|
|
|
Bank balance
|
30
|
|
|
Revenue
|
|
1,510
|
|
Purchases
|
884
|
|
|
Discount received
|
|
76
|
|
Return inwards
|
28
|
|
|
Wages & salaries
|
144
|
|
|
Insurance expenses
|
14
|
|
|
Inventory at 1 June 2010
|
128
|
|
|
Trade Payables
|
|
200
|
|
Trade receivables
|
256
|
|
|
Loan notes interest
|
4
|
|
|
Administration Expenses
|
64
|
|
|
Energy expenses
|
70
|
|
|
Allowance for receivables at
|
|
8
|
|
Directors remuneration
|
56
|
|
|
Retained earnings at 1 June 2010
|
|
104
|
|
Dividend paid
|
20
|
|
|
£1 Ordinary shares
|
|
570
|
|
Share premium account
|
|
60
|
|
10% loan notes
|
|
40
|
|
2,704
|
2,704
|
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:
|
Cost of Sales
|
Distribution cost
|
Administrative Expenses
|
|
Discount received
|
-
|
-
|
100%
|
|
Energy expenses
|
50%
|
20%
|
30%
|
|
Insurance expenses
|
-
|
50%
|
50%
|
|
Wages and salaries
|
40%
|
35%
|
25%
|
|
Directors' remuneration
|
-
|
-
|
100%
|
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.