Profit or Loss Account – NBC Institute

FA – May 2019 – L1 – Q1 – Accruals and prepayments | Non-current assets and depreciation | Preparation of limited liability company financial statements

Prepare the Statement of Profit or Loss and the Statement of Financial Position for Nhyiraba Ltd, incorporating adjustments for depreciation, accruals, and provisions.

Question

The trial balance below was extracted from the ledger of Nhyiraba Ltd as at 31 December 2018.

The following additional information is provided:
i) Allowance is to be made for depreciation on the non-current assets on a straight-line method at the following rates:

Building: 3%
Plant & Machinery: 20%
Motor Vehicle: 20%
Furniture & Fittings: 10%

ii) The value of land included in Land and Building is GH¢20,000,000.

iii) The following payments were made in advance:

Rent: GH¢4,320,000
Insurance: GH¢1,740,000

iv) One year interest is due on the loan notes.

v) Provision for doubtful debt is to be adjusted so that it is 3% of trade receivables.

vi) Allowance is to be made for audit fees of GH¢3,600,000.

vii) Directors’ fees of GH¢4,500,000 were due at the year-end.

viii) The cost of closing inventories at 31/12/2018 was GH¢43,740,000. However, due to a market recession, the net realizable value of the goods is GH¢37,430,000.

ix) The directors have recommended a transfer of GH¢20,000,000 to the general reserve.

x) The year’s preference dividend is to be provided for.

xi) Current year income tax charged was GH¢9,630,000.

xii) Authorised share capital comprises:

50,000,000 10% preference shares at GH¢1 each GH¢50,000,000.
250,000,000 ordinary shares at GH¢0.5 each GH¢100,000,000.

Required:
a) Prepare Nhyiraba Ltd’s Statement of Profit or Loss for the year end 31 December 2018. (10 marks)
b) Prepare Nhyiraba Ltd’s Statement of Financial Position as at 31 December 2018. (10 marks)

Answer

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Tags: Accruals, Depreciation, Financial Statements, Profit or Loss Account, Statement of Financial Position
Level: Level 1

FA – Nov 2018 – L1 – Q3 – Preparation of limited liability company financial statements

Prepare the Statement of Comprehensive Income and Statement of Financial Position for Bob and Sons using IFRS.

Question

Question:
Bob and Sons prepares its financial statements to 31 December every year. At 31 December 2017, the company’s trial balance was as follows:

The following additional information is relevant:
i) Depreciation is to be provided as follows:

Building – 3% per year on cost
Motor Vehicle – 20% per year on cost
Equipment & Furniture – 10% per year on cost
ii) It is the policy of the company not to charge depreciation in the year of disposal.
iii) Land was revalued later in the year for GH¢15,000,000. No change was required to the value of the building.
iv) Inventory value at 31 December 2017 amounted to GH¢1,840,000.
v) Rent recorded in the trial balance represents 15 months rent paid to 31 March 2018.
vi) A provision of 10% of trade receivables is to be made.
vii) During the year, a motor vehicle costing GH¢1,200,000 was disposed of. The vehicle had been in existence for 3 years. Proceeds from the sale of the vehicle were GH¢500,000. This has not been accounted for in the books of Bob and Sons.

Required:
Prepare the Statement of Comprehensive Income for Bob and Sons for the year ended 31 December 2017 and the Statement of Financial Position as at 31 December 2017 in compliance with the provisions of International Financial Reporting Standards (IFRS). (20 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accruals, Depreciation, Financial Statements, Profit or Loss Account, Statement of Financial Position
Level: Level 1

Topic: Preparation of limited liability company financial statements
Series: NOV 2018

FA – May 2018 – L1 – Q5 – Preparation of limited liability company financial statements

Prepare a Statement of Profit or Loss and a Statement of Financial Position from a provided trial balance and additional information.

Question

Sawaba Limited is a company involved in the construction and fitting of kitchens and wardrobes. The following trial balance was extracted from its books as at 31 October 2017:

The following information, based on your investigations, has also come to your attention:
i) Inventory as at 31 October 2017 was GH¢387,100.
ii) Depreciation is to be charged as follows:

Buildings 4% Straight Line on Cost
Plant & Equipment 15% of Reducing Balance
Land is not being depreciated.
iii) The land and buildings were revalued in total at GH¢1,300,000, of which land amounted to GH¢200,000, as at 31 October 2017. This has not been recorded in the books.
iv) Rent relates to a display unit rented, and its rental period is yearly starting on 1 April each year. The yearly amount of GH¢12,000 is paid in full on this date.
v) There are outstanding balances for Marketing Costs, Salaries, and Telephone Expenses amounting to GH¢2,420, GH¢3,610, and GH¢280, respectively, which have not yet been included in the above trial balance.
vi) A customer owing GH¢6,000 went into liquidation. The liquidator has assured Sawaba Limited that it will receive 10% of the amount. Sawaba Limited has decided that the Allowance for Doubtful Debts should be set at 5%.
vii) Provide for any Loan interest due.
viii) All Expenses are to be allocated evenly between Distribution Costs and Administrative Expenses.

Required:
Prepare a Statement of Profit or Loss Account and Statement of Financial Position for Sawaba Limited for the financial year-ending 31 October 2017. (20 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accruals and Prepayments, Bad Debt, Depreciation, Financial Statements, Profit or Loss Account, Statement of Financial Position
Level: Level 1

Topic: Preparation of limited liability company financial statements
Series: MAY 2018

FA – May 2019 – L1 – Q1 – Accruals and prepayments | Non-current assets and depreciation | Preparation of limited liability company financial statements

Prepare the Statement of Profit or Loss and the Statement of Financial Position for Nhyiraba Ltd, incorporating adjustments for depreciation, accruals, and provisions.

Question

The trial balance below was extracted from the ledger of Nhyiraba Ltd as at 31 December 2018.

The following additional information is provided:
i) Allowance is to be made for depreciation on the non-current assets on a straight-line method at the following rates:

Building: 3%
Plant & Machinery: 20%
Motor Vehicle: 20%
Furniture & Fittings: 10%

ii) The value of land included in Land and Building is GH¢20,000,000.

iii) The following payments were made in advance:

Rent: GH¢4,320,000
Insurance: GH¢1,740,000

iv) One year interest is due on the loan notes.

v) Provision for doubtful debt is to be adjusted so that it is 3% of trade receivables.

vi) Allowance is to be made for audit fees of GH¢3,600,000.

vii) Directors’ fees of GH¢4,500,000 were due at the year-end.

viii) The cost of closing inventories at 31/12/2018 was GH¢43,740,000. However, due to a market recession, the net realizable value of the goods is GH¢37,430,000.

ix) The directors have recommended a transfer of GH¢20,000,000 to the general reserve.

x) The year’s preference dividend is to be provided for.

xi) Current year income tax charged was GH¢9,630,000.

xii) Authorised share capital comprises:

50,000,000 10% preference shares at GH¢1 each GH¢50,000,000.
250,000,000 ordinary shares at GH¢0.5 each GH¢100,000,000.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accruals, Depreciation, Financial Statements, Profit or Loss Account, Statement of Financial Position
Level: Level 1

FA – Nov 2018 – L1 – Q3 – Preparation of limited liability company financial statements

Prepare the Statement of Comprehensive Income and Statement of Financial Position for Bob and Sons using IFRS.

Question

Question:
Bob and Sons prepares its financial statements to 31 December every year. At 31 December 2017, the company’s trial balance was as follows:

The following additional information is relevant:
i) Depreciation is to be provided as follows:

Building – 3% per year on cost
Motor Vehicle – 20% per year on cost
Equipment & Furniture – 10% per year on cost
ii) It is the policy of the company not to charge depreciation in the year of disposal.
iii) Land was revalued later in the year for GH¢15,000,000. No change was required to the value of the building.
iv) Inventory value at 31 December 2017 amounted to GH¢1,840,000.
v) Rent recorded in the trial balance represents 15 months rent paid to 31 March 2018.
vi) A provision of 10% of trade receivables is to be made.
vii) During the year, a motor vehicle costing GH¢1,200,000 was disposed of. The vehicle had been in existence for 3 years. Proceeds from the sale of the vehicle were GH¢500,000. This has not been accounted for in the books of Bob and Sons.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accruals, Depreciation, Financial Statements, Profit or Loss Account, Statement of Financial Position
Level: Level 1

Topic: Preparation of limited liability company financial statements
Series: NOV 2018

FA – May 2018 – L1 – Q5 – Preparation of limited liability company financial statements

Prepare a Statement of Profit or Loss and a Statement of Financial Position from a provided trial balance and additional information.

Question

Sawaba Limited is a company involved in the construction and fitting of kitchens and wardrobes. The following trial balance was extracted from its books as at 31 October 2017:

The following information, based on your investigations, has also come to your attention:
i) Inventory as at 31 October 2017 was GH¢387,100.
ii) Depreciation is to be charged as follows:

Buildings 4% Straight Line on Cost
Plant & Equipment 15% of Reducing Balance
Land is not being depreciated.
iii) The land and buildings were revalued in total at GH¢1,300,000, of which land amounted to GH¢200,000, as at 31 October 2017. This has not been recorded in the books.
iv) Rent relates to a display unit rented, and its rental period is yearly starting on 1 April each year. The yearly amount of GH¢12,000 is paid in full on this date.
v) There are outstanding balances for Marketing Costs, Salaries, and Telephone Expenses amounting to GH¢2,420, GH¢3,610, and GH¢280, respectively, which have not yet been included in the above trial balance.
vi) A customer owing GH¢6,000 went into liquidation. The liquidator has assured Sawaba Limited that it will receive 10% of the amount. Sawaba Limited has decided that the Allowance for Doubtful Debts should be set at 5%.
vii) Provide for any Loan interest due.
viii) All Expenses are to be allocated evenly between Distribution Costs and Administrative Expenses.

Required:
Prepare a Statement of Profit or Loss Account and Statement of Financial Position for Sawaba Limited for the financial year-ending 31 October 2017. (20 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accruals and Prepayments, Bad Debt, Depreciation, Financial Statements, Profit or Loss Account, Statement of Financial Position
Level: Level 1

Topic: Preparation of limited liability company financial statements
Series: MAY 2018

Question Tag: Profit or Loss Account

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FA – May 2019 – L1 – Q1 – Accruals and prepayments | Non-current assets and depreciation | Preparation of limited liability company financial statements

Prepare the Statement of Profit or Loss and the Statement of Financial Position for Nhyiraba Ltd, incorporating adjustments for depreciation, accruals, and provisions.

FA – Nov 2018 – L1 – Q3 – Preparation of limited liability company financial statements

Prepare the Statement of Comprehensive Income and Statement of Financial Position for Bob and Sons using IFRS.

FA – May 2018 – L1 – Q5 – Preparation of limited liability company financial statements

Prepare a Statement of Profit or Loss and a Statement of Financial Position from a provided trial balance and additional information.

FA – May 2019 – L1 – Q1 – Accruals and prepayments | Non-current assets and depreciation | Preparation of limited liability company financial statements

Prepare the Statement of Profit or Loss and the Statement of Financial Position for Nhyiraba Ltd, incorporating adjustments for depreciation, accruals, and provisions.

FA – Nov 2018 – L1 – Q3 – Preparation of limited liability company financial statements

Prepare the Statement of Comprehensive Income and Statement of Financial Position for Bob and Sons using IFRS.

FA – May 2018 – L1 – Q5 – Preparation of limited liability company financial statements

Prepare a Statement of Profit or Loss and a Statement of Financial Position from a provided trial balance and additional information.

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Question Tag: Profit or Loss Account

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FA – May 2019 – L1 – Q1 – Accruals and prepayments | Non-current assets and depreciation | Preparation of limited liability company financial statements

Prepare the Statement of Profit or Loss and the Statement of Financial Position for Nhyiraba Ltd, incorporating adjustments for depreciation, accruals, and provisions.

You're reporting an error for "FA – May 2019 – L1 – Q1 – Accruals and prepayments | Non-current assets and depreciation | Preparation of limited liability company financial statements"

FA – Nov 2018 – L1 – Q3 – Preparation of limited liability company financial statements

Prepare the Statement of Comprehensive Income and Statement of Financial Position for Bob and Sons using IFRS.

You're reporting an error for "FA – Nov 2018 – L1 – Q3 – Preparation of limited liability company financial statements"

FA – May 2018 – L1 – Q5 – Preparation of limited liability company financial statements

Prepare a Statement of Profit or Loss and a Statement of Financial Position from a provided trial balance and additional information.

You're reporting an error for "FA – May 2018 – L1 – Q5 – Preparation of limited liability company financial statements"

FA – May 2019 – L1 – Q1 – Accruals and prepayments | Non-current assets and depreciation | Preparation of limited liability company financial statements

Prepare the Statement of Profit or Loss and the Statement of Financial Position for Nhyiraba Ltd, incorporating adjustments for depreciation, accruals, and provisions.

You're reporting an error for "FA – May 2019 – L1 – Q1 – Accruals and prepayments | Non-current assets and depreciation | Preparation of limited liability company financial statements"

FA – Nov 2018 – L1 – Q3 – Preparation of limited liability company financial statements

Prepare the Statement of Comprehensive Income and Statement of Financial Position for Bob and Sons using IFRS.

You're reporting an error for "FA – Nov 2018 – L1 – Q3 – Preparation of limited liability company financial statements"

FA – May 2018 – L1 – Q5 – Preparation of limited liability company financial statements

Prepare a Statement of Profit or Loss and a Statement of Financial Position from a provided trial balance and additional information.

You're reporting an error for "FA – May 2018 – L1 – Q5 – Preparation of limited liability company financial statements"

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