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2247 Chapter 11

The document contains two examples of financial statements for two different companies, Piccolo and Wilhelmina, for the years ended 31 May 2004 and 31 March 2004 respectively. For each company, it includes a trading and profit and loss account and a balance sheet showing assets, liabilities and equity. The financial statements provide information on revenues, expenses, assets, liabilities and equity for each company.

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13 views3 pages

2247 Chapter 11

The document contains two examples of financial statements for two different companies, Piccolo and Wilhelmina, for the years ended 31 May 2004 and 31 March 2004 respectively. For each company, it includes a trading and profit and loss account and a balance sheet showing assets, liabilities and equity. The financial statements provide information on revenues, expenses, assets, liabilities and equity for each company.

Uploaded by

fp4jcjnsr4
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Chapter 11 Provisions for depreciation of fixed assets

Q1
Piccolo

(a) Trading and Profit and Loss Account for the year ended 31 May 2004
$ $
Sales 300 000
Less cost of sales
Opening stock 30 000
Purchases 186 000
216 000
Closing stock (42 000) 174 000
Gross profit 126 000
Less
Wages 56 000
Heating and lighting 19 400
Repairs to plant and machinery 5 100
Advertising 1 000
Depreciation: freehold buildings 3 200
plant and machinery 11 000 95 700
Net profit 30 300

(b) Balance Sheet at 31 May 2004


Cost Depreciation Net Book Value
$ $ $
Fixed assets
Freehold land and buildings 100 000 43 200 56 800
Plant and machinery 76 000 43 000 33 000
176 000 86 200 89 800
Current assets
Stock 42 000
Trade debtors 14 000
Prepayment 6 000
Bank 5 500
67 500
Current liabilities
Trade creditors 6 300
Expense creditor 1 800 8 100 59 400
149 200

Capital at 1 June 2003 150 000


Profit 30 300
180 300
Drawings: Cash 27 100
Goods 4 000 31 100
149 200
Q2 Wilhelmina

(a) Trading and Profit and Loss Account for the year ended 31 March 2004
$ $ $
Sales 80 600
Less Sales returns 1 590 79 010
Less Cost of sales
Opening stock 13 000
Purchases 50 914
Less Purchases returns 825 50 089
63 089
Closing stock 16 000 47 089
Gross profit 31 921
Wages 13 017
Electricity 1 312
Repairs to machinery 643
Interest: on loan 2 000
on hire purchase 200 2 200
Depreciation: leasehold premises 3 000
plant and machinery 3 325*
office equipment 1 050 7 375
Sundry expenses 1 054 25 601
Net profit 6 320

* Depreciation of plant and machinery: Cost $(21 000 – 6000) $15 000
Less depn. at 1.4.03 $ 9 200
$ 5 800
$5 800 × 25% $ 1 450 +
$30 000 × 25% × 3/12 $ 1 875 = $3325

(b) Balance Sheet at 31 March 2004


Cost Depreciation Net Book Value
$ $ $
Fixed assets
Leasehold property 45 000 16 500 28 500
Plant and machinery 45 000 12 525 32 475
Office equipment 7 000 3 450 3 550
97 000 32 475 64 525
Current assets: Stock 16 000
Trade debtors 1 526
Prepayment 180
Bank 1 964
19 670
Current liabilities
Trade creditors 973
Other creditors
Hire purchase 24 200
Loan interest 1 000
Other expense 300 26 473 (6 803)
57 722
Long-term liability: Loan repayable 2006 20 000
37 722
Capital at 1 April 2003 50 000
Profit 6 320
56 320
Drawings 18 598
37 722

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