Setlloh2- Assessment The assessment example(s) below can be used by centres, or

Question

Setlloh2- Assessment The assessment example(s) below can be used by centres, or alternatively centres can develop their own assessment. Assessment 1 Outcomes covered 1 and 2 Assessment instructions Question1 You are the assistant accountant with IDS Ltd. Your boss has asked you to prepare the draft Income Statement, Statement of Financial Position and Statement of Changes in Equity for the year ended 31 December 2014, for internal use, based on the following Trial Balance (extracted from the computerised record keeping system) and the additional information shown below. In undertaking this task you may refer to the attached pro forma layout. £000 1,500 220 £000 Trade Receivables Trade Payables Administration Expenses 10% Debentures 2019 Inventory at 1 January 2014 Distribution Costs Purchases Revenue Retained Earnings at 1 January 2014 Property (NBV@ 31/12/2013) Plant and Machinery (NBV @ 31/12/2013) Fixture and Fittings (NBV@ 31/12/2013) Motor Vehicles (NBV@ 31/12/2013) Profit on disposal of operations Ordinary Shares of £1 Ordinary Dividend Paid 30/6/2014 Cash and cash equivalents 1,050 1,600 600 340 2,000 3,550 1,090 2,500 650 150 150 220 1100 15 485 8610 Scottish Qualifications Authority

Explanation / Answer

Income statement 000 000 Revenue 3550 Cost of sales Beginning inventory 600 Add:Purchases 2000 2600 Less:Ending inventory 490 2110 Gross profit 1440 Expenses: Administration expenses (220+25) 245 Distribution cost (340-15) 325 Depreciation expense Property 50 Plant and machinery 40 Fixtures and fittings 30 Motor vehicles 60 750 Profit on disposal of operations -220 Operating profit 910 Finance costs Interest on debentures (1600*10%) 160 Profit on ordinary activities before taxation 750 Taxaton 190 Profit on ordinary activities after taxation 560 Statement of financial position 000 000 Non-current assets: Property (2500-50) 2450 Plant and machinery (650-40) 610 Fixtures and fittings (150-30) 120 Motor vehicles (150-60) 90 3270 Current assets Trade receivables 1500 Inventory 490 Cash and cash equivalents 485 Prepaid maintenance cost 15 2490 Total assets 5760 Capital and reserves Ordinary shares 1 1100 Retained earnings 1090 Add:profit for CY 560 Less:Dividend paid 15 1635 2735 Non-current liabilities 10% debentures 1600 current liabilities Trade payables 1050 Bonus payable 25 Corporation tax payable 190 Interest payable (1600*10%) 160 1425 Total equity and liabilities 5760 Statement of changes in equity Ordinary share capital Retained earnings Total equity Balance at 01/01/2014 1100 1090 2190 Changes in equity Profit for current year 560 Dividend paid -15 Balance at 12/31/2014 1100 1635 2735

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