Here is a worked example of the financial statements being produced from the trial balance of a company. The principles applied in the construction of the statement are identical to those used to construct the statements of a sole trader. However, the requirements of IAS 1 mean that the format of the statement must comply with a prescribed layout.
Hallsworth plc Trial balance as at 31 December 2019
|
Dr £000 |
Cr £000 |
|
|
Ordinary share capital (£1 shares) |
800 |
|
|
Plant and equipment at cost |
420 |
|
|
Depreciation on plant and equipment |
95 |
|
|
Investments (noncurrent) |
330 |
|
|
Property at cost |
1,000 |
|
|
Depreciation on property |
150 |
|
|
Inventories as at 1 Jan 2019 |
48 |
|
|
Revenue |
1,100 |
|
|
Purchases |
715 |
|
|
Dividends paid |
87 |
|
|
Dividends received |
28 |
|
|
Retained earnings |
195 |
|
|
Distribution costs |
105 |
|
|
Trade receivables |
85 |
|
|
Trade payables |
62 |
|
|
Accruals |
||
|
Administration costs |
99 |
|
|
Share premium |
300 |
|
|
Cash and cash equivalents |
81 |
|
|
10% Debentures |
250 |
|
|
Interest paid |
10 |
|
|
2,980 |
2,980 |
Additional information:
1The taxation due on the company’s profits for the year is £76,000.
2Distribution costs accrued at 31 Dec 2019 total £8,000.
3Administration costs prepaid at 31 Dec 2019 totalled £4,000.
4Only £10,000 of the interest due on the debentures had been paid by the end of the year.
5Inventory in trade at the year end totalled £76,000.
6The company engaged in a bonus issue of shares during the year which is not recorded in the trial balance. The bonus issue was made on the basis of one new share for every four already held. Reserves were to be mentioned in the most distributable form.