Bài tập buổi 12
Bài tập buổi 12
Bài tập buổi 12
Here is another activity dealing with both of the formats for the income statement:
An extract from the list of balances of Production Limited as at 30 September 20X3 is given below
$ $
Sales revenue 900,000
Opening inventories:
Raw materials 40,000
Work-in-progress 70,000
Finished goods 60,000
Purchase of raw materials 300,000
Wages 200,000
Production overheads 80,000
Administration salaries 100,000
Office rent 20,000
Closing inventories are:
Raw materials 30,000
Work-in-progress 62,000
Finished goods 80,000
Required:
Prepare the company’s income statement for the year ended 30 September 20X3:
(a) classifying expenses by function
(b) classifying expenses by nature.
1 Harmonica
The list of account balances of Harmonica, a limited liability company, at 31 December 20X5 is given below:
Trial balance 31 December 20X5
Dr Cr
$'000 $'000
Sales revenue 28,600
Purchases 18,000
Inventory at 1 January 20X5 4,500
Storage costs 850
Salespersons' salaries and commission 1,850
Administrative salaries 3,070
General administrative expenses 580
General distribution expenses 490
Directors' remuneration 870
Loan interest paid 100
Dividends paid 40
Non-current assets – cost 18,000
– aggregate depreciation, 1 January 20X5 3,900
Trade accounts receivable and payable 6,900 3,800
Allowance for doubtful debts at 1 January 20X5 200
Balance at bank 2,080
10% Loan (repayable 20X9) 1,000
Issued share capital (4m ordinary shares) 4,000
Share premium account 1,300
Retained profit, 1 January 20X5 8,720
Suspense account (see Note 3 below) 1,650
55,250 55,250
The following further information should be allowed for:
1 Inventory at 31 December 20X5 amounted to $5 million.
2 A review of the trade accounts receivable total of $6.9 million showed that it was necessary to write off
debts totalling $0.4 million, and that the allowance for doubtful debts should be adjusted to 2% of the
remaining balances.
3 Two transactions have been entered in the company's cash record and transferred to the suspense account
shown in the list of account balances.
They are:
(a) The receipt of $1.5 million from the issue of 500,000 $1 ordinary shares at a premium of $2 per
share.
(b) The sale of some surplus plant. The plant had cost $1million and had a written down value of
$100,000. The sale proceeds of $150,000 have been credited to the suspense account but no other
entries have been made
4 Depreciation should be charged at 10% per annum on cost at the end of the year and allocated to cost of
sales.
5 The directors propose a final dividend of four cents per share on the shares in issue at the end of the year.
(In accordance with IAS 10 Events after the Reporting Period this proposed dividend should be disclosed
by note).
6 Accruals and prepayments still to be accounted for are:
Prepayments Accruals
$'000 $'000
General administrative expenses 70 140
General distribution expenses 40 90
110 230
7 Ignore taxation.
Required:
Prepare the company’s separate income statement for the year ended 31 December 20X5 and statement of
financial position as at 31 December 20X5 in accordance with International Accounting Standard 1. Notes to the
accounts are not required, apart from that required by item (5) above.
2 Pride Ltd
The following extracts have been taken from the trial balance of Pride, a limited liability company, at 31 March
20X1:
$000 $000
Issued share capital:
500,000 ordinary shares of 50c each 250
Share premium account 1 April 20X0 180
Retained earnings 31 March 20X1 34
Land at cost 210
Buildings:
– cost 1 April 20X0 200
– accumulated depreciation at 1 April 20X0 120
Plant and equipment:
– cost 318
– accumulated depreciation at 1 April 20X0 88
Receivables 146
Cash at bank 50
Payables 94
10% loan notes issued 20W5 100
Allowance for doubtful debts 10
Suspense account 166
Notes:
1 The retained earnings balance of $34,000 shown above is the final balance of retained profit for the year
and may be incorporated into your answer as such.
2 The balance on the suspense account is made up as follows: $000
Receipt of cash on 8 January 20X1 on
the issue of 200,000 ordinary shares of 50c
each at a premium of 30c per share. 160
Proceeds of sale of plant* 6
166
* This plant had originally cost $18,000 and had been written down to $6,000 at 31 March 20X0. The
company’s policy is to provide depreciation for a full year in the year of acquisition of assets and none in
the year of sale.
3 Depreciation is to be provided for on the straight line basis at the following annual rates:
Land Nil
Buildings 2 per cent
Plant and equipment 20 per cent
4 The allowance for doubtful debts is to be increased to $12,000.
5 Prepayments and accruals at 31 March 20X1 were:
Prepayments 8,000
Accruals 4,000
6 The closing inventory was $180,000.
Required:
Prepare the statement of financial position of Pride as at 31 March 20X1 for publication complying as far as
possible with the provisions of the IAS 1, Presentation of Financial Statements.