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Final Accounts of a Company The following balances were extracted from the books of Maddison Ltd as on 31/12/2009 - Leaving Cert Accounting - Question 1 - 2010
Question 1
Final Accounts of a Company The following balances were extracted from the books of Maddison Ltd as on 31/12/2009. Share Capital Authorised - 800,000 Ordinary sha... show full transcript
Worked Solution & Example Answer:Final Accounts of a Company The following balances were extracted from the books of Maddison Ltd as on 31/12/2009 - Leaving Cert Accounting - Question 1 - 2010
Step 1
Prepare a Trading and Profit and Loss Account for the year ended 31/12/2009
Answer
Trading and Profit and Loss Account for Madison Ltd for the year ended 31/12/2009
Sales
- Total Sales: €680,000
- Less Returns Inwards: €7,320
Net Sales: €672,680
Cost of Sales
- Opening Stock: €63,400
- Add Purchases: €279,300
- Add Carriage In: €5,700
Total Cost of Goods Available for Sale: €348,400
- Less Closing Stock: €63,400
Cost of Sales: €324,800
Gross Profit
Gross Profit: €347,880
Expenses
-
Administration Expenses:
- Wages/Salaries: €175,000
- Stationery: €25,300
- Add Purchases: €27,000
-
Directors Fees: €22,000
-
Depreciation:
- Buildings (5% of €600,000): €30,000
- Office Equipment (10% of €85,000): €8,500
-
Insurance Paid: €12,000
-
Less Insurance Claims Received: €3,000
-
Advertising Expenses: €34,000
Total Expenses: €309,300
Net Profit
- Net Profit Before Tax: €38,580
- Less Corporation Tax: €12,200
Net Profit After Tax: €26,380
Profit and Loss Balance on 01/01/2009: €52,600
Profit and Loss Balance on 31/12/2009: €79,000
Step 2
Prepare a Balance Sheet as at 31/12/2009
Answer
Balance Sheet of Madison Ltd as on 31/12/2009
Fixed Assets
| Asset | Cost | Accumulated Depreciation | Net Book Value |
|---|---|---|---|
| Buildings | €600,000 | €30,000 | €570,000 |
| Office Equipment | €85,000 | €8,500 | €76,500 |
Total Fixed Assets: €646,500
Intangible Assets
| Asset | Value |
|---|---|
| Patents | €74,000 |
Total Intangible Assets: €74,000
Current Assets
| Asset | Value |
|---|---|
| Closing Stock | €63,400 |
| Stationery | €6,600 |
| Insurance Prepaid | €68,000 |
| Debtors | €61,200 |
| Less Provision for Bad Debts | €6,800 |
Total Current Assets: €192,400
Creditors
| Creditor | Amount |
|---|---|
| Advertising Due | €2,500 |
| Creditors | €24,300 |
| VAT | €4,800 |
| Bank | €40,000 |
| Debenture Interest Due | €1,200 |
| Tax Due | €3,600 |
Total Creditors: €76,400
Working Capital
Total Net Assets: €836,500
Capital & Reserve
| Capital | Value |
|---|---|
| Authorised Capital | €800,000 |
| Ordinary Shares Capital | €552,675 |
| Profit and Loss Account | €79,000 |
Overall Total: €836,500