Prepare Ajay Ltd Statement of Profit or Loss (Income Statement) for the year ended 31 March 2019 and his Statement of Financial Position as at 31 March 2019. (84 marks)
Identify 3 limitations each of income statement and Statement of financial position (balance sheet). (6 marks)
Note: Show all adjustments
Question
You are provided below the Trial Balance of Ajay Ltd for the year ended 31 March 2019.
Ajay Ltd has been trading for a number of years as a wine merchant. The following list of balances has been extracted from his ledger as at 31 March 2019, the end of his most recent financial year.
DR CR
£ £
Advertising 5,478
Insurance 9,306
Trade Payables 31,511
Purchases 157,443
Drawings 31,288
Rent and Rates 18,612
Sales 290,500
Heat and Light 11,013
Delivery Costs 10,132
Capital 170,600
Salaries and Wages 41,263
Cash in Hand 950
Inventories at 1 April 2018 18,310
Trade Receivables 31,099
Fixtures & Fittings at cost 153,227
Accumulated Depreciation Fixtures & Fittings at 1 April 2018 66,710
Motor Vehicles at cost 182,600
Accumulated Depreciation Motor Vehicles at 1 April 2018 93,500
Bank Overdraft …………. 17,900
655,937 670,721
The following additional information is available as at 31 March 2019
Inventories at the close of business on 31 March 2019 was valued at £25,550
Insurances have been prepaid by £850
Heating and Lighting is accrued by £2,210
Rates have been prepaid by £4,482
Delivery cost is accrued by £905
Depreciation charge for Fixtures and Fittings for the year £12,584.
Depreciation charge for Motor Vehicles for the year £10,440.
