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  • Seminer 12 - Hexam PLC

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    faisza
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    1. Closing inventory for the year ending March 2028 was 91,000 which must be subtracted from cost of sales. 2. A prepayment of expenses for 5 months (Rs. 7,000) made in March 2028 should be subtracted from the relevant expense account. 3. Depreciation of Rs. 8,000 on land was incorrectly charged to administrative expenses instead of being left as part of the cost of land. Warranty provision of Rs. 15,000 is shown as a current liability.

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    Seminer 12 - Hexam Plc

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    1. Closing inventory for the year ending March 2028 was 91,000 which must be subtracted from cost of sales. 2. A prepayment of expenses for 5 months (Rs. 7,000) made in March 2028 should be subtracted from the relevant expense account. 3. Depreciation of Rs. 8,000 on land was incorrectly charged to administrative expenses instead of being left as part of the cost of land. Warranty provision of Rs. 15,000 is shown as a current liability.

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    6 views1 page

    Seminer 12 - Hexam PLC

    Uploaded by

    faisza
    1. Closing inventory for the year ending March 2028 was 91,000 which must be subtracted from cost of sales. 2. A prepayment of expenses for 5 months (Rs. 7,000) made in March 2028 should be subtracted from the relevant expense account. 3. Depreciation of Rs. 8,000 on land was incorrectly charged to administrative expenses instead of being left as part of the cost of land. Warranty provision of Rs. 15,000 is shown as a current liability.

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    of 1

    1.

    inventory is valued at lower cost and net relisable value

    15,000 + 76,000 = 91,000 closing inventory

    91,000 must be subtracted from out COS

    2. y/e is March 20x8

    prepayment of 5 months

    subtract prepayment amount to expense account

    5/12 x 16,800 = (7000)

    3. land does not depriciate

    400,000 / 50 = 8000 charge it to admin expense

    34,000 charge to cost of sales

    4. 60,000 - 4800 = 55200 - irrecoverable debt

    increase debt expense account

    + 2760 = trade receivables

    5. 8% of the bank loan

    interest paid is expense if sopl

    6.

    7. warranty is money set aside to cover for damagers. 15,000 is a provision as a current liability in
    sofp

    8. prepayment - current asset in sofp

    subtract in admin expense

    prepare admin expense, then distribution then cost of sales

    COS = Opening inventory + purchases - CI +Any other adjustments related to COS

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