Leaving Cert Accounting FINAL ACCOUNTS - Company: Amber Ltd. has an Authorised Cap

Question

Amber Ltd. has an Authorised Capital of €1,800,000 divided into 1,200,000 Ordinary Shares at €1 each and 600,000 10% Preference Shares at €1 each.  
The following Trial Balance was extracted from its books at 31/12/2006:

Buildings at cost  
Delivery Vans (cost €280,000)  
Discount (Net)  
Profit and Loss Balance 1/1/2006  
Stocks and Purchase  
Debenture interest for first four months  
9% Investments 1/1/06  
Patent (comprising 3 months investment income)  
Inter Dividends for the first 6 months  
Bad Debts Provision  
Debtors and Creditors  
Bank  
Salaries and general expenses  
Debenture

Issued Share Capital - Ordinary Shares  
- 10% Preference Shares

Directors fees  
Rent  
Advertising (including Suspense)

The following information and instructions are to be taken into account:

(i) Stocks at 31/12/2006 at cost was €5,200 - this figure includes damaged stock which cost €6,600 but which now has a net realisable value of €2,600.

(ii) Patents, which incorporated 3 months investment income, are to be written off over a 5 year period commencing in 2006.

(iii) Provision for depreciation on delivery vans at the annual rate of 12.5% of original cost or the date of purchase to the date of sale.

NOTE: On 31/12/06 a delivery van which cost €240,000 on 30/06/2006 was traded in for the new van which cost €65,000.

(iv) Directors fees were increased as a result of the incorrect figure reported by the previous accountant to €48,000; actual fees incurred for the year were €40,000.

(v) Interest in respect of an investment has been taken from the bank on the latest statement, which has been reconciled as at 31/12/2006.

(vi) Preference Dividends for 2006 have been provided bringing the total dividend up to 11 cent per share.

(vii) Rent payable for the month charged against the period has been provided at 2% of cost.

Amber Ltd. has an Authorised Capital of €1,800,000 divided into 1,200,000 Ordinary Shares at €1 each and 600,000 10% Preference Shares at €1 each - Leaving Cert Accounting - Question 1 - 2007

Worked Solution & Example Answer:Amber Ltd. has an Authorised Capital of €1,800,000 divided into 1,200,000 Ordinary Shares at €1 each and 600,000 10% Preference Shares at €1 each - Leaving Cert Accounting - Question 1 - 2007

Trading and Profit Loss Account for the year ending 31/12/2006

Balance Sheet as at 31/12/2006

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