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    Balance Sheet Preparation

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    1. Authorized share capital of the company is 100 000 ordinary shares of $ 1 each, of which 75,000 were issued and fully paid at $ 1.15 per share.

    2. All fixed assets were bought on 1 June 2002,the date the company was incorporated.
    Depreciation is applied as follows.

    (i) Motor vehicles-- 40 % reducing balance.
    (ii) Equipment-- 20 % straight line,after taking into account a 10 % residual balance.

    3. A dividend of $ 0.12 per share has been proposed for the year ended 31 May 2005.

    4. A provision for doubtful debts of 5% of debtors at 31 May 2005 is to be created.

    5. Stock costing $ 2500 had been sent to a customer on a sale or return basis on 25
    May 2005.It had been neither returned nor sold by the year end and no entries regarding it had been made in the accounts.

    Required:
    (a) James De first Ltd's balance sheet as at 31 May 2005 in vertical format.

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    https://brainmass.com/business/financial-statements/balance-sheet-preparation-50797

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    ( a) James De first Ltd's balance sheet as at 31 May 2005 in vertical format.

    PAID UP SHARE CAPITAL =75000
    SHARE PREMIUM= 11250

    MOTOR VEHICLES VALUE DEPRECIATION
    JUNE 1 2002 60000 24000
    31-May-03 36000 14400
    May 31-04 21600 8640
    May ...

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    This solution gives a step by step explanation of the preparation of a Balance Sheet.

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