The trial balance for HV Limited as at 31 March 2021 was presented as follows.
HV Limited
Trial Balance at 31 March 2021
Debit and credit balances shown.
Additional information
1 Inventory at 31 March 2021 had a value of $6090.
2 Fittings are to be depreciated at 20% per annum by the reducing balance method.
3 Rent contains a payment of $1800 covering the 3 months from 1 March 2021 to 31 May 2021.
4 Wages accrued at 31 March 2021 amounted to $2250.
5 No debenture interest was paid for the year ended 31 March 2021.
6 There were no dividends outstanding at 31 March 2021.
7 $2000 is to be moved to a general reserve on 31 March 2021.
(a)[8]
Prepare an income statement for HV Limited for the year ended 31 March 2021.
(b)[5]
Prepare the statement of changes in equity for HV Limited covering the year ended 31 March 2021.
(c)[3]
Calculate the return on capital employed for the year ended 31 March 2021. Give your answer to two decimal places.
(d)[4]
State two ways in which ordinary shares differ from preference shares.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme.