Assignment - Task to do
Prepare Balance Sheet as at 31 December 2017.
Profit and loss statement for the year ending 31 December 2018.
Balance sheet as at 31 December 2018.
Statement of cash flow of the year ending 31 December 2018
Financial information -
The company was initially setup by issuing 220000 shares at an issues price of $1 each.
A factory was purchased at a cost of $500000.
The new factory is largely financed by taking out a $420000 mortgage loan.
In addition to the mortgage loan the company took out a$612000 interest-only unsecured bank loan.
In addition to the factory ,the company purchased the following
- Plant and equipment to the value of $280000
- Furniture's, fixtures and fittings to the value of$ 150000
- Inventory to the value of $180000
All of the transactions occurred late in December 2017.
Any cash remaining after these purchases was put into the bank account.
On first march 2018 the company took out a bank overdraft. The outstanding balance of 31 December 2018 was $34000 (This is to be recorded separately from the cash balance rather than combined)
On 1 July 2018 motor vehicle to the value of $140000 were purchased
On 31 December 2018 the company issued corporate bonds to the value of $670000, and use the proceeds to purchase an additional factory costing $670000
On 31 December 2018, the company issues $103000 new ordinary shares at a price of $2 each and 195000 new preference shares at a price of $1 each. Some of the amount raised was used to buy additional plant and equipment for a new factory at a cost of $220000.
During the course of the year ending 31 December 2018, the following transactions occurred.
Products to the value of $1928000 were sold and delivered. These sales were made on the basis of one month's credit of the $1928000 in sales occurring in 2018, Products to the value of $193000 were delivered in 2018 and will not be and will not be paid for until January 2019.
Raw material to the value of $1022000 were ordered and taken delivery of. These purchases were made on the basis of one,s month credit of the $1022000 in raw material purchased in 2018 , Raw material to the value of $90000were ordered and taken delivery of in December 2018 and will not be paid for until January 2019.
Payment of wages $93000
Payment of rent for 2018 $87000
Payment of motor vehicle running expenses $37000
PAYMENT FOR INSAURANCE for 2018 $35000
Payment of interest $93000
Payment of printing and stationary $20000
Payment for heating and lighting in 2018 $21000
Payment for telephone, postage, and internet charges $10000
In addition additional $30000 was paid in December for January's rent.
In addition to the above-mentioned interest payment, the principal owing to the mortgage loan was reduced by $34000.
The value of inventory on 31 December 2018 was $144000.
Additional information
Depreciation on motor vehicles, plants and equipment, furniture and fixtures and fittings is calculated on straight-line basis at the rate of 10% per year. Land and building is not depreciated.
The company faces a tax rate of 20% Dividend payout ratio is 65%.