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The following trial balance relates to Selt.plc for the year ended 31 December 2021: Equity shares of £1 each Share Premium Retained earnings at 1 January 2021 Property at cost Depreciation on property at 1 January 2021 Plant and equipment at cost Depreciation on plant and equipment at 1 January 2021 Inventory at 1 January 2021 Trade receivables Cash and cash equivalents Trade payables 5% Loan repayable 2026 Revenue Purchases Distribution costs Administrative expenses Research and development expenditure Loan Interest paid Dividend paid £'000 34,800 Required: A Statement of Profit or Loss for the year ended 31 December 2021. A Statement of Financial Position as at 31 December 2021 22,800 4,900 4,000 6,840 155,000 22,050 12,750 19,600 300 4,000 287,040 £'000 56,000 2,000 7,780 3,200 4,500 1,560 12,000 200,000 287,040 Further notes: 2) 1) Inventory was valued at £3,800,000 on 31 December 2021. (This valuation is before note (4) below is considered). Property includes land valued at £800,000. The buildings are to be depreciated over a period of 20 years. This is an administrative expense. 3) Plant and equipment are to be depreciated at 20% reducing balance basis. The depreciation is to be included in cost of sales. 4) On 30 December 2021, a customer returned goods which were faulty. They had bought the goods from Selt.plc for £10,000 cash and the sale had been entered in the accounts. These goods have a reduced sales value of £4,000 and had an original cost of £4,500. Selt plc has agreed to refund the customer in full, but no accounting entries had been made at 31 December 2021 and no refund made. 5) Research and development expenditure includes development costs of £12,600,000 which are to be capitalised. Research costs are to be included in cost of sales. No amortisation is required.

The following trial balance relates to Selt.plc for the year ended 31 December 2021: Equity shares of £1 each Share Premium Retained earnings at 1 January 2021 Property at cost Depreciation on property at 1 January 2021 Plant and equipment at cost Depreciation on plant and equipment at 1 January 2021 Inventory at 1 January 2021 Trade receivables Cash and cash equivalents Trade payables 5% Loan repayable 2026 Revenue Purchases Distribution costs Administrative expenses Research and development expenditure Loan Interest paid Dividend paid £'000 34,800 Required: A Statement of Profit or Loss for the year ended 31 December 2021. A Statement of Financial Position as at 31 December 2021 22,800 4,900 4,000 6,840 155,000 22,050 12,750 19,600 300 4,000 287,040 £'000 56,000 2,000 7,780 3,200 4,500 1,560 12,000 200,000 287,040 Further notes: 2) 1) Inventory was valued at £3,800,000 on 31 December 2021. (This valuation is before note (4) below is considered). Property includes land valued at £800,000. The buildings are to be depreciated over a period of 20 years. This is an administrative expense. 3) Plant and equipment are to be depreciated at 20% reducing balance basis. The depreciation is to be included in cost of sales. 4) On 30 December 2021, a customer returned goods which were faulty. They had bought the goods from Selt.plc for £10,000 cash and the sale had been entered in the accounts. These goods have a reduced sales value of £4,000 and had an original cost of £4,500. Selt plc has agreed to refund the customer in full, but no accounting entries had been made at 31 December 2021 and no refund made. 5) Research and development expenditure includes development costs of £12,600,000 which are to be capitalised. Research costs are to be included in cost of sales. No amortisation is required.

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter5: The Income Statement And The Statement Of Cash Flows
Section: Chapter Questions
Problem 16E
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The following trial balance relates to Selt.plc for the year ended 31 December 2021: Equity shares of £1 each Share Premium Retained earnings at 1 January 2021 Property at cost Depreciation on property at 1 January 2021 Plant and equipment at cost Depreciation on plant and equipment at 1 January 2021 Inventory at 1 January 2021 Trade receivables Cash and cash equivalents Trade payables 5% Loan repayable 2026 Revenue Purchases Distribution costs Administrative expenses Research and development expenditure Loan Interest paid Dividend paid Further notes: £'000 34,800 22,800 Required: A Statement of Profit or Loss for the year ended 31 December 2021. A Statement of Financial Position as at 31 December 2021 4,900 4,000 6,840 155,000 22,050 12,750 19,600 300 4,000 287,040 £'000 56,000 2,000 7,780 3,200 4,500 1,560 12,000 200,000 287,040 2) 1) Inventory was valued at £3,800,000 on 31 December 2021. (This valuation is before note (4) below is considered). Property includes land valued at £800,000. The buildings are to be depreciated over a period of 20 years. This is an administrative expense. 3) Plant and equipment are to be depreciated at 20% reducing balance basis. The depreciation is to be included in cost of sales. 4) On 30 December 2021, a customer returned goods which were faulty. They had bought the goods from Selt.plc for £10,000 cash and the sale had been entered in the accounts. These goods have a reduced sales value of £4,000 and had an original cost of £4,500. Selt plc has agreed to refund the customer in full, but no accounting entries had been made at 31 December 2021 and no refund made. 5) Research and development expenditure includes development costs of £12,600,000 which are to be capitalised. Research costs are to be included in cost of sales. No amortisation is required.
Transcribed Image Text:The following trial balance relates to Selt.plc for the year ended 31 December 2021: Equity shares of £1 each Share Premium Retained earnings at 1 January 2021 Property at cost Depreciation on property at 1 January 2021 Plant and equipment at cost Depreciation on plant and equipment at 1 January 2021 Inventory at 1 January 2021 Trade receivables Cash and cash equivalents Trade payables 5% Loan repayable 2026 Revenue Purchases Distribution costs Administrative expenses Research and development expenditure Loan Interest paid Dividend paid Further notes: £'000 34,800 22,800 Required: A Statement of Profit or Loss for the year ended 31 December 2021. A Statement of Financial Position as at 31 December 2021 4,900 4,000 6,840 155,000 22,050 12,750 19,600 300 4,000 287,040 £'000 56,000 2,000 7,780 3,200 4,500 1,560 12,000 200,000 287,040 2) 1) Inventory was valued at £3,800,000 on 31 December 2021. (This valuation is before note (4) below is considered). Property includes land valued at £800,000. The buildings are to be depreciated over a period of 20 years. This is an administrative expense. 3) Plant and equipment are to be depreciated at 20% reducing balance basis. The depreciation is to be included in cost of sales. 4) On 30 December 2021, a customer returned goods which were faulty. They had bought the goods from Selt.plc for £10,000 cash and the sale had been entered in the accounts. These goods have a reduced sales value of £4,000 and had an original cost of £4,500. Selt plc has agreed to refund the customer in full, but no accounting entries had been made at 31 December 2021 and no refund made. 5) Research and development expenditure includes development costs of £12,600,000 which are to be capitalised. Research costs are to be included in cost of sales. No amortisation is required.
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