Accounting 9706 · AS & A Level · Preparation of financial statements

Preparation of financial statements — practice question

B Limited is a private limited company operating as a wholesaler of garden equipment. The draft trial balance dated 30 June 2016 has been taken from the books of account.
(a)[17]

Prepare the income statement for the year ended 30 June 2016. Use the next page for your workings.

(b)[5]

Prepare an extract of the current assets section of the statement of financial position at 30 June 2016.

(c)[4]

Explain the reasons a company should provide for depreciation on its non-current assets.

(d)[4]

Explain two differences between ordinary shares and preference shares.

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