UK how to construct statement of Financial position of this question?

Dec 6, 2013
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Brian is setting up his own television repair business, which he is going to run as a limited company Bryco Ltd.

Prior to the start of his business Brian has invested £2000 in the company for which he has received two £1 shares (which represent the total equity of the business)

He has also take out a 5 year commercial loan of £6000 at 10% p.a. on an interest only basis to cover the purchase of a van for £6000

He has invested £1000 in a stock of commonly needed spare parts, half of which he has paid for in cash. The other half has been obtained on a trade credit.

He has secured an industrial unit for his workshop at monthly rental of £450.

He has purchased £600 worth of workshop equipment.

He has bought a computer and printer for £600 to help administrate the business.

a) Construct the statement of Financial position of Bryco Ltd immediately before the commencement of trading.

During the first year of trading, company generates £37,000 in revenue from his repairs.

He purchases a further £6000 worth of parts

His fuel costs (for van) are £2300

His business phone bill is £500

His closing inventory is worth £700

He is owed £250 for completed but uncollected repairs.

He has paid £300 in parking fines for the van

He draws a salary of £1000 per month

At the end of year
His trade payable account is £600
His cash balance is £10050

The van is depreciated over a 4 year period on a straight line basis with £1000 residual value

The computer is depreciated over a 4 year period on straight line basis over 10 years with zero residual value.

The workshop equipment is depreciated on a straight line basis over 10 years with zero residual value.

b) Generate the statement of Comprehensive income up to the profit before tax

You are told that the capital allowance on both the van and workshop equipment is based on depreciation on a reducing balance basis to 25% residual value over 4 years and there is a special allowance that allows the full cost of computer equipment to be offset against tax in the first year of trading.

c)Adjust the pre tax profits to arrive at the taxable profits and hence calculate the tax charge( tax rate is 20%)

d)Hence complete the statement of Comprehensive income and prepare the end of year statement of financial position

Actually, I'm stuck in the question d's statement of financial position, I can't figure out a balance statement…………pray some one can offer a solution~~~~~Thank you~~~~~~


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