Question Four

QUESTION FOUR

GLORY LTD
INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007
GH¢
Revenue / 180,400
Cost of Sales / (81,700)
Gross Profit / 98,700
Distribution Costs / (12,000)
Administration Expenses / (13,500)
Operating Profit / 73,200
Other Income / 2,800
Profit before Finance Cost & Tax / 76,000
Finance costs / (1600)
Profit before tax / 74,400
Taxation / (17,100)
Profit after tax / 57,300
INCOME SURPLUS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2007
GH¢
Balance b/d / 25,500
Profit after tax / 57,300
Balance c/d / 82,800
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2007
ASSETS / GH¢ / GH¢
NON-CURRENT ASSETS
Property, Plant and Equipment / 228,500
Investment / 27,100
255,600
CURRENT ASSETS
Inventory / 37,900
Trade Receivable / 35,100
73,000
Total Assets / 328,600
EQUITY & LIABILITIES
EQUITY
Ordinary Share Capital / 60,000
Revaluation Surplus / 11,000
Retained Earnings / 82,800
Shareholders Fund / 153,800
NON-CURRENT LIABILITIES
2% Loan / 80,000
Deferred tax / 10,000
90,000
CURRENT LIABILITIES
Trade Payables / 34,700
Taxation / 18,700
Interest on loan / 800
Accruals / 24,000
Bank / 6,600
84,800
Total Equity & Liabilities / 328,600

WORKINGS

1. Cost of Sales
Per Question / 89,200
Plant capitalisation / (24,000)
Depreciation-Building / 3000
-Plant / 13,500
81,700
2. Non-Current Assets Schedule
Cost/Valuation / Land / Building / Plant / Total
GH¢ / GH¢ / GH¢ / GH¢
Balance b/d / 30,000 / 100,000 / 128,000 / 258,000
Revaluation - / (3,000) / - / (3,000)
Transfer from cost of sales - - / 24,000 / 24,000
Balance c/d / 30,000 / 97,000 / 152,000 / 279,000
Depreciation
Balance b/d - / - / 32,000 / 32,000
Charge for the year - / 5,000 / 13,500 / 18,500
Balance c/d / - / 5,000 / 45,500 / 50,500
NBV at end / 30,000 / 92,000 / 106,500 / 228,500
NBV at start / 30,000 / 100,000 / 96,000 / 226,000

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