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Illustration 1
Yami Limited
Statement of Profit or Loss for the year ended 31st December 20X7
$
Revenue 300,000
Cost of Sales (w3) -200,000
Gross Profit 100,000
Other Income (w4) 700
Distribution Cost -
Administrative Expenses (w5) -52,700
Operating Profit 48,000
Finance Cost -3,000
Profit Before Tax 45,000
Income Tax Expense (w2) -10,000
Profit for the year 35,000

Statement of Changes in Equity

Ordinary Preference Retained Total
Share Capital Share Share Profit
Premium Capital
$ $ $ $ $
Balance b/f 100,000 10,000 50,000 9,000 169,000
Profit for the year 35,000 35000
Dividend paid to equity shareholders -5,000 -5000
Dividend paid to preference shareholders -4,000 -4000
100,000 10,000 50,000 35,000 195,000

Statement of Financial Position as at 31st December 20X7

Assets $ $
Non-Current Assets
Property, Plant and Equipment (w6) 206,000
Investments 10,000

Current Assets
Inventories 40,000
Trade Receivables 27,000
Bank 2,000 69,000
Total Assets 285,000

Equity and Liabilities

Ordinary Share Capital 100,000
Share Premium 10,000
Preference Share Capital 50,000
Retained Profit 35,000
195,000

Non-Current Liabilities
10% debenture loan stock 30,000

Current Liabilities
Trade Payables 50,000
Income Tax Liability 10,000 60,000
Total Equity and Liabilities 285,000

Workings
1. Depreciation = 20% x $15,000 = $3,000
Dr Administrative Expenses Cr Motor Van

2. Income Tax = $10,000

Dr Profit or Loss A/c Cr Current Liabilities - Tax Payable

3. Cost of Sales $
Opening Inventory 20,000
Purchases 220,000
Closing Inventory -40,000
200,000

4. Other Income $
Dividend Received 700

5. Administrative Expenses $
Office Expenses 47,000
Motor Van Expenses 2,700
Depreciation (w1) 3,000
52,700

6. Property, Plant and Equipment

Freehold Motor Van Total
Land
$ $ $
Cost 200,000 15,000 215,000
Accumulated Depreciation -6,000 -6000
Depreciation for the year -3,000 -3000
200,000 6,000 206,000

Illustration 2
Tanhosier Ltd
Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 March 2012
$'000
Revenue 50,332
Cost of Sales (w5) -29,536
Gross Profit 20,796
Other Income 0
Distribution Cost (w6) -9,142
Administrative Expenses (w7) -7,039
Operating Profit 4,615
Finance Cost (w8) -400
Profit Before Tax 4,215
Income Tax Expenses (w4) -235
Profit for the year 3,980

Other Comprehensive Income -

Statement of Changes in Equity

Share Share Retained
Capital Premium Earnings Total
$'000 $'000 $'000 $'000
Balance b/f 10,000 5,000 23,457 38,457
Profit for the year 3,980 3980
10,000 5,000 27,437 42,437

Statement of Financial Position as at 31 March 2012

Assets $'000
Non-Current Assets
Property, Plant and Equipment (w9) 33,602

Current Assets
Inventories (w1) 8,107
Trade Receivables 9,045
Cash at bank 182 17,334
Total Assets 50,936
Equity and Liabilities
Equity
Share Capital 10,000
Share Premium 5,000
Retained Earnings 27,437
42,437
Non-Current Liabilities
8% bank loan repayable 2015 5,000

Current Liabilities
Trade payables 2,481
Other payable (w2) 157
Interest payable (w3) 200
Income Tax Payable (w4) 235
Accruals 426 3,499
50,936

Workings
1. Adjusted Closing Inventories $
As per information provided 8,407,000
Cost of Inventories -480,000
Net Realizable Value of Inventories 180,000
8,107,000

2. Transport Costs = $157,000

Dr Distribution Cost Cr Current Liability - Other Payable

3. Interest on Bank Loan (6 months) = 8% x $5,000,000 x 6/12 = $200,000

Dr Finance Cost Cr Interest Payable

4. Income Tax = $235,000

Dr Profit or Loss A/c Cr Current Liability - Tax Payable

5. Cost of Sales $
Opening Inventory 7,865,000
Purchases 29,778,000
Closing Inventory (w1) -8,107,000
29,536,000

6. Distribution Cost $
Distribution Costs 8,985,000
Transport Costs (w2) 157,000
9,142,000
7. Administrative Expenses $
Administrative expenses 7,039,000
7,039,000

8. Finance Cost $
Interest 200,000
Interest on Bank Loan (w3) 200,000
400,000

9. Property, Plant and Equipment $

Cost 59,088,000
Accumulated Depreciation -25,486,000
33,602,000