Ian Sharp is a sole trader who buys and sells electrical goods. The following data are forecast for the six-month period between 1 January and 30 June 2017: Purchases (£) Sales ID Jan 1,200 4,500 Feb 1,400 4,800 Mar 1,300 6,000 Apr 1,400 6,200 May 1,500 7,000 June 1,800 8,000 Other information relating to cash flow is as follows: •Sharp employs a part-time assistant whom […]

The following extracts are taken from the balance sheet of Surridge Ltd: As at 31 December 2017 As at 31 December 2018 £000 £000 Taxation owing 65 43 The income statement for the year ended 31 December 2018 shows an entry for taxation as £187,000. Calculate the amount of taxation actually paid out by Surridge Ltd in the year to 31 December 2018.

This example is based on the financial statements and budgets for a sole trader – I Yates – for the six months to 30 June 2018. Here is the balance sheet at the end of December 2017: I Yates Balance sheet as at 31 December 2017 £ £ £ Non-current assets Premises 50,000 Equipment 20,000 Less Depreciation 14,000 6,000 56,000 Current assets Inventory 5,500 Trade […]

I Yates Cash budget for six months ended 30 June 2018 Jan Feb Mar Apr May Jun £ £ £ £ £ £ Cash inflows Receipts from 11,000 15,000 24,000 29,000 34,000 34,000 trade receivables Rent received 400 400 Total inflows 11,400 15,000 24,000 29,400 34,000 34,000 Cash outflows Payments to trade payables 9,000 12,000 18,000 20,000 26,000 28,000 Wages and salaries 2,400 2,400 2,400 […]

Odejayi Ltd produces computer desks. The production manager has collected the following information in order to produce a production budget for the next four months: (i)Demand is expected to be 320 desks in April 2018. This should increase by 25% in May and by 20% in the following two months, based on the demand for desks in the previous month. (ii)Stock at the end of […]

Bruno produces go-karts which he sells to local retailers. He has decided to produce a sales and debtors budget to help him plan ahead. The following data are available for January to June 2014. Month Sales (number of go-karts) Jan 100 Feb 80 Mar 120 Apr 120 May 150 Jun 180 •Each go-kart will be sold for £50 for the first four months, then the […]

From the following data, construct a cash budget for the six months ending 31 December 2016: (a)Purchases and sales are expected to be as follows: Units: Jul Aug Sep Oct Nov Dec 2003 2003 2003 2003 2003 2003 Purchases 170 170 250 210 240 250 Sales 160 180 190 280 300 320 (b)The selling price of each unit is £50. (c)The purchase price of each […]

The following is a worked example of a set of financial statements for a limited company produced for internal use Shortland plc Trial balance as at 31 Dec 2018 E £ Issued ordinary share capital (Et shares) 250,000 5% Debenture 2024 40,000 Retained earnings 15,600 Property 300,000 Plant and equipment 62,000 Sales revenue 178,000 Purchases 87,500 Inventory as at 1 January 2018 14,750 Distribution costs […]

The directors decide to make a bonus issue of shares on the basis of one share for every four shares held. The directors have decided to utilize all the company’s reserves equally. Equity £ Ordinary shares of £1 each 12,000,000 Revaluation reserve 2,000,000 Profit and loss account 5,000,000 19,000,000 This means that the company will be creating ¼ × 12,000,000 = 3,000,000 bonus shares of […]

In producing one unit of product A21, the following standard cost for materials has been set: 20 metres × £7.00 per metre = £140.00 However, recent production data show that the firm is using 24 metres @ £5.50 per metre in the production of one unit: Total materials variance = Actual materials cost – Standard materials cost Actual materials cost Standard materials cost Materials cost […]