Task1You are provided below the Trial Balance of London Ventures for the year ended 31 March 2021.London Ventures has been trading for a number of years as a wine merchant. The following list of balances has been extracted from his ledger as at 31 March 2021, the end of his most recent financial year.DR CR£ £Delivery Costs 10,000Capital 160,600Salaries and Wages 41,263Cash in Hand 950Inventories at 1 April 2020 13,310Trade Receivables 31,099Fixtures & Fittings at cost 153,227Accumulated Depreciation Fixtures & Fittings at 1 April 2020 66,710Motor Vehicles at cost 172,600Accumulated Depreciation Motor Vehicles at 1 April 2020 83,500Bank Overdraft ……………….. 17,900Advertising 5,478Insurance 9,306Trade Payables 31,379Purchases 152,300Drawings 31,288Rent and Rates 18,612Sales 290,357Heat and Light 11,013Total 650,446 650,446
The following additional information is available as at 31 March 2021:(a) Inventories at the close of business on 31 March 2021 was valued at £20,550 (b) Insurances have been prepaid by £850(c) Heating and Lighting is accrued by £1,100(d) Rates have been prepaid by £2,482(e) Delivery cost is accrued by £905(f) DepreciationchargeforFixturesandFittingsfortheyear£11,584.(g) Depreciation charge for Motor Vehicles for the year £9,440.You are required to: Task1a (35marks)Prepare an Income Statement for the year ended 31 March 2021 for London Ventures
Task1b (42marks)Prepare a Statement of Financial Position as at 31 March 2021 for London Ventures.Task2 (3marks)Identify 3 possible limitations of the Income Statement for London VenturesTask3 (3marks)Identify 3 possible limitations of the Statement of financial position for Ventures.Task4 (12marks)Explain how London Ltd can effectively manage the following: a) Inventory Daysb) Trade Payable Days c) Trade receivable Days
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