- 20 Marks
FR – Nov 2020 – L2 – Q4 – Presentation of Financial Statements (IAS 1)
Prepare the Statement of Profit or Loss and Other Comprehensive Income for Gbenga Nigeria Plc based on provided trial balance.
Question
Gbenga Nigeria Plc trial balance as at December 31, 2019 is shown below:
| Item | N’000 | N’000 |
|---|---|---|
| Revenue | 2,290,125 | |
| Administrative expenses | 237,150 | |
| Selling and distribution expenses | 175,200 | |
| Legal and professional expenses | 81,150 | |
| Allowance for receivables | 8,625 | |
| Inventories – finished goods – 31/12/18 | 276,750 | |
| Work-in-progress – 31/12/18 | 49,125 | |
| Inventories – raw materials at cost – 31/12/18 | 162,600 | |
| Purchases – raw materials | 1,125,900 | |
| Carriage inwards – raw materials | 15,750 | |
| Manufacturing wages | 375,000 | |
| Manufacturing overheads | 187,500 | |
| Authorised and issued 900,000 ordinary shares of 50 kobo each fully paid | 450,000 | |
| 150,000 8.4% cumulative preference shares of N1 each fully paid | 150,000 | |
| Revaluation surplus | 65,000 | |
| Share premium | 150,000 | |
| General reserve | 85,000 | |
| Retained earnings – 31/12/18 | 425,250 | |
| Patents and trademarks | 323,250 | |
| Motor vehicle at cost | 112,500 | |
| Freehold property at cost | 375,000 | |
| Leasehold property at cost | 112,500 | |
| Plant and equipment at cost | 225,000 | |
| Furniture and fittings at cost | 75,000 | |
| Amortisation of leasehold property – 31/12/18 | 22,500 | |
| Accumulated depreciation @ 31/12/2018: | ||
| – Plant and equipment | 102,750 | |
| – Furniture and fittings | 23,625 | |
| – Motor vehicles | 37,500 | |
| 10% loan notes | 150,000 | |
| Trade payables | 146,250 | |
| Trade receivables | 266,445 | |
| Bank overdraft | 76,875 | |
| Cash | 7,680 | |
| 4,183,500 | 4,183,500 |
Additional information:
(i) A gain of N20,000 made on the revaluation of old freehold property during the year is yet to be accounted for.
(ii) Inventories at December 31, 2019 were:
- Raw materials: N168,900
- Finished goods: N413,025
- Work-in-progress: N56,700
(iii) Legal and professional expenses include solicitor’s fees for purchase of new freehold land during the year of N7,500.
(iv) Provision is to be made for full year’s interest on the loan notes.
(v) The leasehold land and buildings are held on a 50-year lease, with 40 years unexpired life left as at the end of December 31, 2018.
(vi) Depreciation for the year is to be charged as follows:
- Plant and equipment 8% on cost – charged to production
- Furniture and fittings 10% on cost – charged to administration
- Motor vehicles 20% on carrying amount – charged 25% to administration and 75% to selling and distribution.
(vii) Income tax on the profit for the year is estimated at N68,900 and is due for payment on February 28, 2020.
Required:
Prepare the statement of profit or loss and other comprehensive income for the year ended December 31, 2019.
Find Related Questions by Tags, levels, etc.
- Tags: Depreciation, Expenses, IAS 1, OCI, Profit or Loss, Revenue
- Level: Level 2
- Topic: Presentation of Financial Statements (IAS 1)
- Series: NOV 2020