Chapter 2

Q7

Statement of profit or loss for the year ended 31 March 20X8

Revenue 2,010,000

Cost of sales (960+150-160) (950,000)

Gross profit 1,060,000

Distribution cost (420+20) (440,000)

Administrative expenses (210+16+20) (246,000)

Operating profit 374,000

Finance cost (10,000)

Investment income 75,000

Profit before tax 439,000

Income tax expense (74,000)

Profit for the year 365,000

Statement of changes in equity

Share capital Retained Total equity

earnings
Balance at 1 600,000 180,000 780,000
April 20X7
Dividends (100,000) (100,000)
Total 365,000 365,000
comprehensive (Net profit)
income for the
year
Balance at 31 600,000 445,000 1,045,000
March 20X8

Statement of Financial position as at 31 March 20X8

Asset

Non-current asset

PPE 530,000

Non current asset Investment 560,000

Current asset 1,090,000

Inventory 160,000
Trade and receivables 470,000 630,000

Total asset 1,720,000

Equity and Liabilities

Equity

Ordinary share capital 600,000

Retained earnings 445,000

Total equity 1,045,000

Non current liabilities

Provision for warranty cost (205+16) 221,000

Current liabilities

Trade and payables (260+40) 300,000

Bank overdraft 74,000

Taxation – current liability 80,000 454,000

Total equity and liabilities 1,720,000

Chapter 4 (See back)

Q5

Workings

Addition to new factory

Construction cost 125

Legal fees 25

150

Addition to plant and equipment

External cost 800

Labour (80,000 x 100/120 67

Start up cost 20

887

Depreciation

Head office 46

New factory (1,250 – 600) x 2% x 7/12 8

Old factory (500 x 2%) 10

18

Plant and equipment (887 x 20% x7/12) 103

Old factory accumulated depreciation

Brought forward at 1 October 20X8 (500-310) 190

Charge for year 10

200

4) revaluation gain/loss = revalued amount (fair value) – carrying amount

Fair value> carrying amount = revaluation gain

Fair value< carrying amount = revaluation loss

Head office revaluation

Original cost 1,500

Depreciation (four years at 2%) (120)

Carrying amount 1 October 20X6 1,380

Revaluation gain (2,100-1,380) 720

*subsequent depreciation based on revalued amount

Revalued amount at 1 October 20X6 2,100

Depreciation (2,100/46 x 2) (91)

Balance as 1 October 20X8

Depreciation (2,100/46) (46)

Revaluation loss (263)

(2,100-1,700 = 400)

(400-91-46)

Carrying amount 30 September 20X9 1,700

Impairment loss old factory

Carrying amount brought forward 310

Depreciation to 30 September (10)

300

Recoverable amount (200-25) (175)

Charge to profit or loss 125

Statement of financial position

Equity

Revaluation surplus (720-263) 457

Chapter 5

Q5
Chapter 6

Q11