Test your understanding 2 – P

P Statement of profit or loss and other comprehensive income for the year ended 31
March 20X1
$000
Revenue 5,300
Cost of Sales (1,350)
Gross profit 3,950
Distribution cost (370)
Administrative expenses (490)
Profit from operations 3,090
Income from investments 210
Finance cost (190)
Profit before tax 3,110
Income tax expense (470)
Profit for period 2,640
Other comprehensive income: -
Total comprehensive income for the period 2,640

P Statement of changes in equity for the year ended 31 March 20X1

Retained
Share capital Share premium Total
earnings
$ $ $ $
Balance at 1
1,500 800 1,163 3,463
April 20X0
Total
comprehensive 2,640 2,640
income
Dividends (390) (390)
Balance at 31
1,500 800 3,413 5,713
March 20X1

Note: Dividends declared after the year end will not be adjusted for.
P Statement of financial position as at 31 March 20X1
$000 $000
Non-current assets
Property, plant and
4,250
equipment
Current assets
Inventories 114
Trade and other receivables 418
Prepayments 25
Investments 2,700
Cash and cash equivalents 12
3,269
Total assets 7,519
 Equity and liabilities
Capital and reserves
Issued ordinary share
1,500
capital
Share premium 800
Retained earnings 3,413
5,713
Non-current liabilities
Long-term loans 1,200
Current liabilities
Trade payables 136
Income tax 470
606
Total equity and liabilities 7,519

Test your understanding 3 – Picklette

Picklette Statement of profit or loss and other comprehensive income for the year ended
31 March 20X1
$000
Revenue 1,300
Cost of Sales (W1) (388)
Gross profit 912
Distribution cost (W1) (246)
Administrative expenses (W1) (176)
Profit from operations 490
Income from investments -
Finance cost (W2) (8)
Profit before tax 482
Income tax expense (W3) (135)
Profit for period 347
Other comprehensive income: -
Total comprehensive income for the period 347

Picklette Statement of financial position as at 31 March 20X1

$000 $000
Non-current assets
Property, plant and equipment
182
(W4)
Current assets
Inventories 250
Trade and other receivables 738
Cash and cash equivalents 9
997
Total assets 1,179
Equity and liabilities
Capital and reserves
 Share capital 200
Retained earnings 611
811
Non-current liabilities
10% Loan 80
Current liabilities
Trade payables 60
Accrued expenses (W6) 93
Income tax 135
288
Total equity and liabilities 1,179

Picklette Statement of changes in equity for the year ended 31 March 20X1
Retained
Share capital Total
earnings
$000 $000 $000
Balance at 1 April 20X0 200 270 470
Total comprehensive
347 347
income
Dividends (W2) (6) (6)
Balance at 31 March 20X1 200 611 811

Workings
(W1)
COS Distribution Administration
$000 $000 $000
Purchases 470
Opening inventory 150
Distribution costs 240
Administrative costs 170
Closing inventory (250)
Dep’n – Land and
3 1 1
buildings (60:20:20)
Dep’n – Plant and
15 5 5
machinery (60:20:20)
388 246 176

(W2) Loan interest due (10% x $80) = $8 (IS)

Amount paid (TB) $5, therefore accrual required for $3
(W3) Tax charge
Estimated charge for the year $135
(W4) Property, plant and equipment
Land and buildings Plant and machinery Total
 Cost $ $ $
At 1 April 20X0 210 125 335
At 31 March 20X1 210 125 335
Acc dep’n
At 1 April 20X0 48 75 123
Charge for year (W5) 5 25 30
At 31 March 20X1 53 100 153
Carrying amount at
157 25 182
31 March 20X1
Carrying amount at 1
162 50 212
April 20X0

(W5) Depreciation
Land and buildings 5% x $100 = $5
P & M 20% x $125 = $25
(W6) Accrued expenses
As per TB 90
Interest accrual (W2) 3
As at 31 March 20X1 93

Test your understanding 4 – Thistle

Thistle Statement of financial position as at 30 June 20X1
$ $
Non-current assets
Property, plant and equipment (W1) 1,459,220
Current assets
Inventories (W3) 62,200
Trade receivables 71,500
Prepayments 970
Cash and cash equivalents (W8) 129,360
264,030
Total assets 1,723,250
Equity and liabilities
Capital and reserves
Ordinary share capital 800,000
Share premium 100,000
Retained earnings 654,570
1,554,570
Non-current liabilities
10% Loan 80,000
Current liabilities
Trade payables 60,820
Accruals 1,360
Debenture interest owing (W4) 8,000
Income tax 18,500
 88,680
Total equity and liabilities 1,723,250

Thistle Statement of changes in equity for the year ended 30 June 20X1
Retained
Share capital Share premium Total
earnings
$ $ $ $
Balance at 30
750,000 60,000 540,000 1,350,000
June 20X0
Total
comprehensive 114,570 114,570
income (W7)
Dividends (W2) - -
Issue of share
50,000 40,000 - 90,000
capital (W2)
Balance at 30
800,000 100,000 654,570 1,554,570
June 20X1

Workings
(W1) Property, plant and equipment
Land and Fixtures &
Motor vehicles Total
buildings fittings
Cost/Valuation $ $ $ $
At 1 July 20X0 1,400,000 67,500 19,800 1,487,300
Additions 100,000 100,000
Disposals (24,000) (24,000)
At 30 June 20X1 1,500,000 43,500 19,800 1,563,300
Accumulated
depreciation:
At 1 July 20X0 58,000 30,250 8,400 96,650
Charged during
14,000 5,450 1,980 21,430
the year (W6)
Disposals (14,000) (14,000)
At 30 June 20X1 72,000 21,700 10,380 104,080
Carrying amount
At 30 June 20X1 1,428,000 21,800 9,420 1,459,220
At 1 July 20X0 1,342,000 37,250 11,400 1,390,650

(W2) Share capital

50c ordinary shares No.
Authorised shares 1,400,000
Issued and fully paid 1,000,000
No.
Number of issued shares at 1 July 20X0 900,000
Number Issued in the year 100,000
Number of issued shares at 30 June 20X1 1,000,000
(W3) Inventory
$
Raw materials 32,500
Finished goods 29,700
62,200

(W4) Loan interest

Interest due for the year $8,000 ($80,000 x 10%) payable 1 July 20X1
(W5) Gain on disposal
$
Proceeds 12,000
Carrying value (24,000 – 14,000) 10,000
Profit on disposal 2,000

(W6) Depreciation
Building 2% x $700,000 (1,400,000 – land $800,000 + additions $100,000) = $14,000
Motor vehicles 20% x (cost $43,500 – depn ($30,250 - $14,000)) = 20% x $27,250 = $5,450
Fixture and fittings 10% x $19,800 = $1,980
(W7) Profit for year
$
Per TB 160,500
Gain on disposal (W5) 2,000
Depreciation (W6)
-buildings (14,000)
-motor vehicles (5,450)
-fixtures & fittings (1,980)
Income tax expense (18,500)
Finance cost (W4) (8,000)
Profit for the year 114,570

(W8) Cash and cash equivalents

$
TB 217,360
Proceeds from sale of NCAs 12,000
Purchase of NCAs (100,000)
Cash and cash equivalents 129,360