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The following balances were extracted from the books of Dawn Ltd as at 31/12/2021: € € Share capital Authorised - 950,000 ordinary shares at €1 each Issued - 500,000 ordinary shares at €1 each 500,000 Delivery vans at cost 60,000 Buildings (Cost €620,000) 595,200 Office equipment 50,000 Accumulated depreciation of office equipment 12,000 Patents 120,000 Stock of goods for resale (01/01/2021) 80,500 Stock of stationery (01/01/2021) 1,500 Wages & general expenses 126,400 Stationery 6,200 Advertising 20,600 Light & heat 22,000 Purchases 262,800 Sales 654,000 Returns outwards (purchases returns) 7,200 Debtors 145,000 VAT 4,000 Directors fees 32,000 Provision for bad debts 1,300 10% Debentures (issued 01/04/2021) 200,000 Debenture interest 10,200 Bank 4,900 Profit/loss balance 01/01/2021 80,000 Discount 4,000 1,532,400 1,532,400 You are given the following additional information: (i) Stock of goods for resale on 31/12/2021, €50,000 - Leaving Cert Accounting - Question 1(A) - 2022

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Question 1(A)

The-following-balances-were-extracted-from-the-books-of-Dawn-Ltd-as-at-31/12/2021:--€--€--Share-capital---Authorised---950,000-ordinary-shares-at-€1-each---Issued---500,000-ordinary-shares-at-€1-each-------------------------------500,000--Delivery-vans-at-cost-60,000---Buildings-(Cost-€620,000)-595,200---Office-equipment-50,000---Accumulated-depreciation-of-office-equipment-12,000---Patents-120,000---Stock-of-goods-for-resale-(01/01/2021)-80,500---Stock-of-stationery-(01/01/2021)-1,500---Wages-&-general-expenses-126,400---Stationery-6,200---Advertising-20,600---Light-&-heat-22,000---Purchases-262,800---Sales-654,000---Returns-outwards-(purchases-returns)-7,200---Debtors-145,000---VAT-4,000---Directors-fees-32,000---Provision-for-bad-debts-1,300---10%-Debentures-(issued-01/04/2021)-200,000---Debenture-interest-10,200---Bank-4,900---Profit/loss-balance-01/01/2021-80,000---Discount-4,000----1,532,400--1,532,400--You-are-given-the-following-additional-information:--(i)-Stock-of-goods-for-resale-on-31/12/2021,-€50,000-Leaving Cert Accounting-Question 1(A)-2022.png

The following balances were extracted from the books of Dawn Ltd as at 31/12/2021: € € Share capital Authorised - 950,000 ordinary shares at €1 each Issued - ... show full transcript

Worked Solution & Example Answer:The following balances were extracted from the books of Dawn Ltd as at 31/12/2021: € € Share capital Authorised - 950,000 ordinary shares at €1 each Issued - 500,000 ordinary shares at €1 each 500,000 Delivery vans at cost 60,000 Buildings (Cost €620,000) 595,200 Office equipment 50,000 Accumulated depreciation of office equipment 12,000 Patents 120,000 Stock of goods for resale (01/01/2021) 80,500 Stock of stationery (01/01/2021) 1,500 Wages & general expenses 126,400 Stationery 6,200 Advertising 20,600 Light & heat 22,000 Purchases 262,800 Sales 654,000 Returns outwards (purchases returns) 7,200 Debtors 145,000 VAT 4,000 Directors fees 32,000 Provision for bad debts 1,300 10% Debentures (issued 01/04/2021) 200,000 Debenture interest 10,200 Bank 4,900 Profit/loss balance 01/01/2021 80,000 Discount 4,000 1,532,400 1,532,400 You are given the following additional information: (i) Stock of goods for resale on 31/12/2021, €50,000 - Leaving Cert Accounting - Question 1(A) - 2022

Step 1

Prepare a trading and profit and loss account for the year ended 31/12/2021.

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Answer

Trading and Profit and Loss Account of Dawn Ltd for year ended 31/12/2021

DescriptionAmount (€)
Sales654,000
Less: Cost of Sales
Opening Stock80,500
Purchases262,800
Less: Purchases Returns(7,200)
Cost of Goods Available for Sale336,100
Closing Stock(50,000)
Cost of Sales286,100
Gross Profit367,900

Expenses

DescriptionAmount (€)
Administration
Stationery7,100
Wages & General Expenses132,200
Directors Fees32,000
Light & Heat22,000
Depreciation: Buildings (2% of €620,000)12,400
Depreciation: Office Equipment (10% of €50,000)5,000
Depreciation: Delivery Vans (20% of €60,000)12,000
Advertising15,450
Increase in Provision for Bad Debts1,600
Total Expenses129,350

Income

DescriptionAmount (€)
Discount Received4,000
Operating Profit133,350

Net Profit

DescriptionAmount (€)
Net Profit before Tax118,350
Less: Corporation Tax18,000
Net Profit After Tax100,350
Add: Profit and Loss Balance 01/01/202180,000
Profit and Loss Balances 31/12/2021180,350

Step 2

Prepare a balance sheet as at 31/12/2021.

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Answer

Balance Sheet of Dawn Ltd as at 31/12/2021

Fixed Assets

DescriptionCost (€)Depreciation (€)Net Book Value (€)
Buildings620,00037,200582,800
Office Equipment50,00015,80034,200
Delivery Vans60,00012,00048,000
Total Fixed Assets665,000

Current Assets

DescriptionAmount (€)
Closing Stock50,000
Stock of Stationery600
Debtors145,000
Less: Provision for Bad Debts(2,900)
Total Current Assets197,850

Total Assets

DescriptionAmount (€)
Total Assets862,850

Liabilities

DescriptionAmount (€)
Creditors65,000
Corporation Tax18,000
VAT4,000
Wages & General Expenses due5,800
Total Current Liabilities92,800

Long term Liabilities

DescriptionAmount (€)
10% Debentures200,000
Total Liabilities292,800

Shareholder's Equity

DescriptionAmount (€)
Share Capital500,000
Profit and Loss Balance180,350
Total Equity680,350

Total Liabilities and Equity

DescriptionAmount (€)
Total Liabilities and Equity862,850

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