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Final Accounts of a Company The following balances were extracted from the books of Green Ltd as at 31/12/2018: € € Share capital Authorised - 950,000 ordinary shares at €1 each Issued - 430,000 ordinary shares at €1 each Delivery vans at cost 70,000 Buildings 660,000 Office equipment 75,000 Patents 80,000 Accumulated depreciation - buildings 33,000 Accumulated depreciation - office equipment 7,500 Stock of goods for resale (01/01/2018) 91,500 Stock of stationery (01/01/2018) 1,200 Advertising 4,500 Stationery Purchases 880,000 Sales 18,200 Returns inwards (sales returns) Creditors 82,000 Debtors VAT 6,000 Light and heat 12,100 Provision for bad debts 4,000 Directors’ fees 36,400 10% Debentures (issued 01/04/2018) 120,000 Debenture interest 5,200 Bank 8,500 Profit/loss balance 01/01/2018 62,900 Rent and rates 22,100 Insurance 12,400 Commission 6,100 1,640,000 1,640,000 You are given the following additional information: (i) Stock of goods for resale on 31/12/2018, €54,500 - Leaving Cert Accounting - Question 1 - 2019
Question 1
Final Accounts of a Company The following balances were extracted from the books of Green Ltd as at 31/12/2018: € € Share capital Authorised - 950,000 ordinary sh... show full transcript
Worked Solution & Example Answer:Final Accounts of a Company The following balances were extracted from the books of Green Ltd as at 31/12/2018: € € Share capital Authorised - 950,000 ordinary shares at €1 each Issued - 430,000 ordinary shares at €1 each Delivery vans at cost 70,000 Buildings 660,000 Office equipment 75,000 Patents 80,000 Accumulated depreciation - buildings 33,000 Accumulated depreciation - office equipment 7,500 Stock of goods for resale (01/01/2018) 91,500 Stock of stationery (01/01/2018) 1,200 Advertising 4,500 Stationery Purchases 880,000 Sales 18,200 Returns inwards (sales returns) Creditors 82,000 Debtors VAT 6,000 Light and heat 12,100 Provision for bad debts 4,000 Directors’ fees 36,400 10% Debentures (issued 01/04/2018) 120,000 Debenture interest 5,200 Bank 8,500 Profit/loss balance 01/01/2018 62,900 Rent and rates 22,100 Insurance 12,400 Commission 6,100 1,640,000 1,640,000 You are given the following additional information: (i) Stock of goods for resale on 31/12/2018, €54,500 - Leaving Cert Accounting - Question 1 - 2019
Step 1
Prepare a trading and profit and loss account for the year ended 31/12/2018.
Answer
Trading Profit and Loss Account of Green Ltd for the year ended 31/12/2018
| Particulars | € |
|---|---|
| Sales | 880,000 |
| Less: Sales returns | 18,200 |
| Net Sales | 861,800 |
| Cost of Sales | |
| Opening stock (01/01/2018) | 91,500 |
| Purchases | 470,000 |
| Less: Closing stock (31/12/2018) | 54,500 |
| Cost of Sales | 507,000 |
| Gross Profit | 354,800 |
| Less Expenses | |
| Insurance | 9,300 |
| Rent and rates | 22,100 |
| Light and heat | 12,100 |
| Directors’ fees | 36,400 |
| Depreciation on buildings | 13,200 |
| Depreciation on office equipment | 6,750 |
| Total Expenses | 104,850 |
| Operating Profit | 249,950 |
| Less: Debenture interest | 12,000 |
| Net Profit for the Year | 237,950 |
| Add: Profit/loss balance (01/01/2018) | 62,900 |
| Net Profit | 300,850 |
| Less: Taxation | 16,000 |
| Final Profit | 284,850 |
Step 2
Prepare a balance sheet as at 31/12/2018.
Answer
Balance Sheet of Green Ltd as at 31/12/2018
| Assets | € |
|---|---|
| Intangible Assets | |
| Patents | 80,000 |
| Fixed Assets | |
| Buildings | 660,000 |
| Office equipment | 75,000 |
| Delivery vans | 70,000 |
| Total Fixed Assets | 805,000 |
| Less: Depreciation | 67,450 |
| Net Book Value | 737,550 |
| Current Assets | |
| Closing stock | 54,500 |
| Stock of stationery | 900 |
| Debtors | 68,680 |
| Bank | 8,500 |
| Total Current Assets | 132,580 |
| Total Assets | 870,130 |
| Equity and Liabilities | |
| Creditors: amounts due within 1 year | |
| Creditors | 82,000 |
| VAT | 6,000 |
| Debenture interest due | 5,200 |
| Advertising due | 1,300 |
| Corporation tax | 16,000 |
| Total Current Liabilities | 110,500 |
| Creditors: amounts due after 1 year | 120,000 |
| Capital and Reserves | |
| Authorised share capital | 950,000 |
| Issued share capital | 430,000 |
| Profit and loss balance (31/12/2018) | 284,850 |
| Total Capital and Reserves | 664,850 |
| Total Liabilities | 870,130 |