The following details relate to the trading activities of Anarkhi Ltd for its first year of trading, to 30 June:

All purchases may be considered as part of cost of sales. All other costs should be allocated 40% to cost of sales, 40% to selling and distribution expenses, and 20% to administration expenses.
Anarkhi Ltd uses the FIFO method of stock valuation. On 23 June there was no trading stock. During the last week of the year, stock transactions were:

5,000 units delivered at £12 each 2,000 units delivered at £13 each 3,000 units sold at £19 each You are required to draft the trading and profit and loss and appropriation account for the year, adopting the Companies Act format as far as possible. You will need to calculate the value of the closing stock and to allocate the expenses as listed above to their Companies Act categories before you can construct the profit and loss account.

The answer is at the back of this book.

Further review questions are available in a separate resource pack which is avail¬

able to lecturers.

Transcribed Image Text:

Purchases Sales 531,946 794,062 Wages 218,470 Transport 54,475 Rent and insurance 30,775 Tax 3,900