3.1. Preparation of financial statements
A subsection of Accounting, 9706, through 3. Financial accounting (A Level)
Listing 10 of 678 questions
Vikran, a sole trader, has extracted the following trial balance from his books of account at 30 June 2014. Dr $ Cr $ Bank 7 600 Capital 200 000 Carriage inwards 4 200 Factory supervision salaries 12 400 General factory expenses 8 100 Heat and light 5 400 Indirect factory wages 36 800 Insurance 12 000 Inventory at 1 July 2013 at cost Raw materials 39 000 Work in progress 48 000 Finished goods 57 000 Manufacturing wages 259 100 Office salaries Office equipment at cost 37 300 90 000 Plant and machinery at cost 270 000 Provision for depreciation at 1 July 2013 Office equipment 38 000 Plant and machinery 90 000 Provision for doubtful debts 1 600 Purchase of finished goods 2 100 Purchase of raw materials 162 000 Returns outwards (raw materials) 1 200 Rent and rates 42 000 Returns inwards 1 800 Revenue 768 500 Trade payables 30 300 Trade receivables 34 800 1 129 600 1 129 600 Additional information Inventory at 30 June 2014 at cost: $ Raw materials 46 000 Work in progress 54 000 Finished goods 52 000 Depreciation is to be provided on all non-current assets at 15% per annum using the reducing balance method. The following expenses are to be apportioned. Factory Office Rent and rates 85% 15% Insurance 80% 20% Heat and light 85% 15% At 30 June 2014 insurance of $4000 had been paid in advance. At 30 June 2014 heat and light of $600 had accrued but remained unpaid. A bad debt of $1800 is to be written off at 30 June 2014. The provision for doubtful debts is to be maintained at 3% of trade receivables. REQUIRED Prepare Vikran’s manufacturing account for the year ended 30 June 2014. Prepare Vikran’s income statement for the year ended 30 June 2014. Explain why a business should depreciate its non-current assets.
9706_s15_qp_23
THEORY
2015
Paper 2, Variant 3
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