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QUESTION $1($LO$2,$ LO$3$ and LO$4)$

Alpha Bakery Lmited produces accounts to $31$ December each vear, You work for the financial

controller who is currently preparing the accounts for the period to $31$ December $2023$ and has

asked for your assistance. The following trial balance has been extractedfrom the generalledger.

Account

$6000$

$6000$

Dr

Cr

Land and buildings at cost

Plant and machinery at cost

Buildings accumulated depreciation as at $1$ January $2023$

Plant & Machinery accumulated depredation as at $1$

January $2023$

Bank balance

Cash in hand

Revenue

Net purchases

Inventory as at $31$ December $2023$

Tade receivables

Tade payables

Adninistrative expenses

Allowance for receivables $1$ danuary $2023$

Retained earnings at $1$ lanuary $2023$

Equity shares $($fo$.50$ per share$)$

Suspense Account

You have been provided with the following additional information:

Depreciation is charged on buildings on a straight$-$Jine basis over $25$ vears.

The value of the land at cost is $6325,000.$

Plant and machinery is depreciated at $25\%$ on a reduding balance basis.

Induded in the inventory valuation is $67,000$ relating to goods which will have to be sold off

at a discount. It is believed the maximum amount that could be generated from the sale of

this inventory is $65,500.$

The general provision for doubtful receivables is to be maintained at $5\%$ of the receivables

balance. The allowance for recevables is treated as an administrative expense.

Administrative expense includes a payment of $64,320$ for business rates for the $12$ months

to $31$ March $2024$

All depreciation is to be charged to cost of sales.

The suspense account balance is thought to have been created as a result of one of the

following errors:

A sales invoice was incorrectly recorded as $$100,000$ rather than $6148,000$

A $648,000$ contra was correctly applied to the receivables control account but the

corresponding entry was not made to the payables control account.

Prepare the statement of profit or loss and the statement of financial position for Alpha Bakery

ttd as at $31$ December $2023.$

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