Here is a worked example of the financial statements being produced from the trial balance of a company. The principles applied in the construction of the statement are identical to those used to construct the statements of a sole trader. However, the requirements of IAS 1 mean that the format of the statement must comply with a prescribed layout. Hallsworth plc Trial balance as at […]

From the following data, present an extract from the statement of cash flows showing the net cash flow from operating activities: 31 December 2012 31 December 2013 £ £ Trade receivables 4,500 3,200 Inventory 2,750 3,950 Trade payables 1,890 2,740 Net profits for the year ended 31.12.13 were £15,690 and depreciation charged that year amounted to £1,120.

Moorcroft Ltd manufactures one product. The production budget for June 2016 shows the following costs per unit: £ Materials (£8 per kg) 4 Labour (£10 per hour) 15/19 Budgeted sales for the month were 5,000 units at £100 each. In July 2016, the management accountants compared the actual performance for the previous month and produced the following information based on actual sales of 5,000 at […]

An extract from the income statement for the year ended 31 December 2016 is presented below: Extract from income statement for year ended 31 Dec 2016 Operating profit 74,454 Less Interest 3,500 Profrt before interest 70,954 Taxation 25,400 Profit for the year 45,554 The following information has also been made available: •Dividends paid for the year amounted to £12,500. •A vehicle which cost £14,000 and […]

Calculate the materials variances from the following data. Again, there is no need to flex any data. (1) Material ZX3 Standard price per kg £7 Standard usage per unit 14 kg Actual price per kg £8 Actual usage per unit 12 kg (2) Material WE32 Standard price per litre £3.25 Standard usage per unit 113 litres Actual price per kg £3.40 Actual usage per unit […]

From the following data, present an extract from the statement of cash flows showing the net cash flow from operating activities: 31 December 2014 £ 31 December 2015 £ Trade receivables 11,329 14,380 Trade payables 18,754 22,345 Inventory 9,986 10,101 Net profits for the year ended 31.12.14 were £56,890 and depreciation charged that year amounted to £7,500.

Thompson plc manufactures a single product. The budgeted costs per unit for the month of April 2014 were: £ Direct materials (£3 per kg) 6 Direct labour (£8 per hour) 20 Anticipated production for April 2014 was 10,000 units. The actual results for April 2014 were: £ Direct materials (20,000 kg) 55 Direct labour 25,000 hours) 240 The actual costs were based on production of […]

The following are extracts from the balance sheets of a company: M at 31 Dec 2013 £000 £000 Mat 31 Dec 2014 £000 £000 Non-current assets Land and property 800 1,000 Plant and equipment at cost 250 300 Less depreciation 130 120 150 150 Motor vans at cost 50 64 Less depreciation 18 32 22 42 •There were no purchases of land and property during […]

Ian Sharp is a sole trader who buys and sells electrical goods. The following data are forecast for the six-month period between 1 January and 30 June 2017: Purchases (£) Sales ID Jan 1,200 4,500 Feb 1,400 4,800 Mar 1,300 6,000 Apr 1,400 6,200 May 1,500 7,000 June 1,800 8,000 Other information relating to cash flow is as follows: •Sharp employs a part-time assistant whom […]

The following extracts are taken from the balance sheet of Surridge Ltd: As at 31 December 2017 As at 31 December 2018 £000 £000 Taxation owing 65 43 The income statement for the year ended 31 December 2018 shows an entry for taxation as £187,000. Calculate the amount of taxation actually paid out by Surridge Ltd in the year to 31 December 2018.