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1. • CommentAuthorkormawa
   • CommentTimeOct 28th 2007

    
   Entertronics plc, are wholesalers of consumer electronics. Increased competition has meant that for a few years profits have been very low and the company has adopted a policy of no dividend payments.
   
   Their accounting year ends on September 30th, and they have extracted the following balances from the company’s books of account. There is a number of closing adjustments which must be taken into account before drafting the final financial statements.
   
   You have been employed to assist in the preparation of the financial statements from the trial balance provided and the additional information concerning the required adjustments.
   
   
   ENTERTRONICS LIMITED: TRIAL BALANCE at September 30th, 20X7
   
   Assets and Liabilities, Capital
   Expenses and Income
   
   Debit
   £,000
   Credit
   £,000
   
   Sales
   Sales returns to Entertronics
   Purchases
   Purchases returns to suppliers
   Opening inventories of merchandise 30/09/06
   Trade receivables
   Trade payables
   Cash in bank
   Long-term loan
   Discounts allowed to customers
   Carriage inwards
   Business premises – at cost
   Motor vehicles – at net book amount
   Equipment – at cost
   Equipment - accumulated depreciation
   Wages
   Electricity
   Telephone
   Insurance
   Rent
   Business rates
   Other operating costs
   Share capital
   Retained earnings
   
   8,000
   100,000
   
   6,500
   12,000
   
   1,800
   
   300
   250
   18,000
   7,500
   3,600
   
   20,000
   825
   325
   225
   1,250
   1,000
   5,000
   145,000
   
   
   1,800
   
   
   13,000
   
   6,600
   
   
   
   
   
   2,100
   
   
   
   
   
   
   
   12,000
   6,075
   
   
   186,575
   186,575
   
   
   Additional information
   1. Closing Inventory of merchandise at September 30th, 20X7 is valued at cost £7,000,000.
   2. Depreciation on equipment for 20X7 is calculated at 25% on cost per annum.
   3. Depreciation on the motor van is calculated at 33% of net book value (cost less depreciation) per annum.
   4. Entertronics owes £175,000 for the telephone and £1,225,000 for electricity.
   5. Expenses include £100,000 for insurance and £1,000,000 for rent both paid a year in advance on January 1, 20X7.
   6. In line with recent policy, no dividends have been paid or are proposed
   7. Provide for tax calculated at 25% of net profit.
   
   
   You are required to prepare Entertronics’s income statement for the year ended September 30th, 20X7 and balance sheet at that date in appropriate format for publication.
   
   Round all calculations to the nearest £,000

   Thankful People: yoyo
2. • CommentAuthorkokos
   • CommentTimeNov 13th 2007 edited

    
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