scarletpanda590

Andrew Joel is a market trader, he opened a business named Waterford Co. The company’s Trial balance as at 31 March 20X6, appears below:
Trial balance of Waterford Co plc at 31 Mach 20X6:
Account
Purchase                             2,594,000
Administrative salaries       572,000
Distribution costs                375,000          
Inventories at 1 April 20X5  751,200
Land and Building - Cost
(land $1,050,000)                2,050,000
Accumulated Depreciation

land and building                                  480,000
Plant and machinery - Cost  810,000
Accumulated Depreciation

plant and machinery                             430,000

6% bank loan repayable

in 10 years                                             280,000

Trade receivables                    80,000
Trade payables                                      25,400
Equity as at April 20X5                          352,000
Cash and cash equivalents    650,000
Revenue                                                6,369,800

Financial cost                           55,000

                                            7,937,200   7,937,200

1. After doing stock take, the inventory at as 31 March 20X6 is:
Item                       Product A

Total Cost              325,000
Selling Price           300,000

2. The company paid $12,000 insurance costs in June 20X5, which covered the period from 1 July 20X5 to 30 June 20X6. This was included in administrative expenses in the trial balance.
3. The company paid repair cost and recorded this transaction in cash and administrative expenses as $760, but the amount should have been $670.
4. Interest on the bank loan for the last three months of the year has not been included in the accounts in the trial balance.
5. On the 1st April 20X5, a machinery costing $10,000 and had been sold for $2,500, making a loss of $1,750. This transaction had not been recorded. Loss on disposal is charged to administrative expense.
6. Management have calculated that an allowance for receivables equal to 10% of the trade receivables balance at 31 March 20X6 is required. The allowance should be charged to administrative expense.
7. Plant and machinery are depreciated on a 10% straight-line basis. Buildings are depreciated over their useful life of 40 years. Depreciation of plant and machinery is charged to administrative expense.

Requirement:
1. Record above transactions, provide explanation if necessary.
2. Prepare the statement of profit or loss of Waterford company for the year ended 31 March 20X6 and the statement of financial position at that date.