Homework answers / question archive / 1

1

Accounting

Share With

1. Formatone pic produced the following trial balance as at 30 June 20x6: £000 £000 2,1600 1,080.0 1.728.0 810.0 4320 504.0 5328 Land at cost Buildings at cost Plant and Equipment at cost Intangible assets Accum depreciation - 30.6.20x5 Buildings Plant and equipment Interim dividend paid Receivables and payables Cash and bank balance Inventory as at 30.6.20X6 Tacation Deferred tax Distribution cost Administrative expenses Retained earnings bf Sales revenue Cost of sales Ordinary shares of 50 each Share premium account 1080 5850 41.4 5868 14.4 37.8 5292 9468 891.0 9.480.6 5,909.4 2,160.0 4320 14,4846 144846 The following information is available: 1) A revaluation of the Land and Buildings on 1 July 20x5 resulted in an increase of £3,240,000 in the Land and £972,000 in the Buildings. This has not yet been recorded in the books. () Depreciation: Plant and Equipment are depreciated at 10% using the reducing balance method. Intangible assets are to be written down by £540,000. Buildings have an estimated life of 30 years from date of the revaluation (ii) Taxation: The current tax is estimated at £169.200. There had been an SMS Rovision in the previous year. Deferred tax is to be increased by £27,000 (V) Capital: 150,000 shares were issued and recorded on 1 July 20x5 for 8Op each. A further dividend of 5p per share has been declared on 30 June 20x6. Required: Prepare for the year ended 30 June 20x6 the statement of comprehensive income. statement of changes in equity and statement of financial position Marks) (Total: 25

2. Do conventional financial accounting practices and definitions encourage or assist corporations to adopt socially and environmentally sustainable business practices? Explain your answer. (10 Marks) 2. What is the role of decision usefulness theory? Marks) 3. Explain the concept of inductive accounting theories. How different are they from deductive accounting theories? (5 Marks) (5 4. Is it necessary to critically evaluate theories before accepting them? Why?(5 Marks) (Total: 25 Marks)