Income Statement Preparation
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1. The summarized Balance sheet as at 30 April 2005 of Clutterbuck Ltd Was as follows
$
Fixed Assets 2550000
Net current assets 950000
3500000
6% of debentures 2005/2006 150000
3350000
ordinary shares of $ 1 2500000
10 % redeemable preferences share of $1 300000
share premium account 200000
Profit and loss account 350 000
3350000
Further information:
1. The market price of the ordinary shares at 30 April 2005 $ 1.60.
2.The dividend yield on ordinary shares was 2.5 per cent.
3.The creditor for taxation at 30 April 2004 was $ 25 000.Taxation paid in the year ended 30 April 2005 amounted to $ 22 000.The liability for taxation on the profit of the year ended 30 April 2005 is $ 31 000 and is carried forward on the taxation account.
4. The retained profit for the year ended 30 April 2005 was $ 60 000.
5.The debentures were issued in 1997.The preference shares were issued at par.
Required:
(a) Prepare Clutterbuck Ltd's Profit and Loss account for the year ended 30 April 2005 in as much detail as possible.The profit and loss Account should commence with the operating profit.
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Solution Summary
This solution explains the preparation of an income statement. It discusses profit and loss accounting.
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See the attached file.
(a) Prepare Clutterbuck Ltd's Profit and Loss account for the year ended 30 April 2005 in as much detail as possible.The profit and loss Account should commence with the operating profit.
Interest on Debenture 9000 ( Debenture * ...
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