The trial balance of Norr Ltd at 31 December 20X2 #8278

The trial balance of Norr Ltd at 31 December 20X2 appeared as follows:Additional information1.
During the year a motor vehicle purchased on 31 March 20W9 for £8,000 was sold for £3,000.
The sale proceeds were debited to the bank account and credited to the sales account, and no
other entries have been made in the financial statements relating to this transaction.2.
Depreciation has not yet been provided for the year. The following rates are applied on the
straight-line basis, with the assumption of no residual value: Fixtures and fittings 10 per
centMotor vehicles 20 per centThe company's policy is to provide a full year's depreciation in
the year of acquisition and no depreciation in the year of disposal.3. Inventory at 31 December
20X2 amounted to £45,000.4. Rates paid in advance amount to £400. Insurance includes £200
paid in advance. An electricity bill covering the quarter to 31 December 20X2 and amounting to
£320 was not received until February 20X3. It is estimated that the audit fee for 20X2 will be
£1,500. An accrual also needs to be made in relation to debenture interest.5. A general
provision for bad debts of 4 per cent of trade receivables is to be carried forward.6. The
directors propose a dividend of £10,000.Requireda. Prepare a statement of comprehensive
income and statement of financial position on the basis of the above information.b. Explain the
meaning of the terms 'provision' and 'reserve', giving one example of each from the statement of
financial position you have prepared.View Solution:
The trial balance of Norr Ltd at 31 December 20X2

ANSWER
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