Albert is the owner of Young Boys Enterprise. The firm produces and distributes beverages (alcoholic and non-alcoholic) in Ghana. However, due to the nature of the business and availability of Mr. Albert, he has instructed and assigned his children including T. Tuchel, P. Guardiola, and J. Mourinho to manage the various departments in the firm in tandem with the skills and techniques possessed by his children. For the purpose of making well-informed decisions and ascertaining which unit managed by his children contributed significantly to his wealth, he has asked you to prepare departmental accounts to assess the performance of his children based on the department assigned.

He revealed that the Department A Alcoholic was managed by T. Tuchel, Department B Soft drinks- (e.g., carbonated drinks, fruit juice) was managed by P. Guardiola, and Department C-Hot drinks - (e.g., tea and coffee) was managed by J. Mourinho. The following balances were extracted from his ledger on 31st December, 2021.

	DR	CR
	GH	GH
Capital		1,500,800
Drawings	540,000
Sales: Department A		6,200,000
Department B		4,650,000
Department C		4,650,000
Inventory at Jan 1: Department A	400,700
Department B	375,000
Department C	380,000
Carriage inwards	37,500
Purchases: Department A	4,800,000
Department B	1,600,000
Department C	3,200,000
Wages: Department A	400,000
Department B	350,000
Department C	205,000
Rates and electricity	114,000
Discount	150,000	250,000
Plant and equipment	750,000
Motor Vehicle	1,200,000
Furniture and fittings	625,000
Trade receivables and payables	112,500	342,500
Rent	363,300
Telephone bills	70,000
Wages and salaries	210,000
Canteen expenses	100,000
Accountancy charges	65,000
Cash in hand	295,300
Cash at bank	1,250,000
	17,593,300	17,593,300

Notes:

(i) Inventory as at 31st December 2021 was as follows:

Department A - GH525,000; Department B - GH350,000; Department C 450,000.

(ii) During the year, Department A transferred goods at a markup of 20% to Department B amounting to GH 150,000, however, at the end of the period 20% of the goods transferred to Department B still remains. Also, service rendered by Department B for Department A costs GH 125,000.

(iii) Accrued expenses were as follows: telephone GH12,500; rates and electricity

GH50,000

(iv) The proportion of the total floor area occupied by each department is as

follows: Department A - 6/15; Department B - 3/15; Department C- 3/15

(v) Depreciation is charged on Plant and Equipment, Motor Vehicle, and Furniture and Fittings at the rate of 12%, 20% and 30% per annum respectively.

(vi) Mr. Albert operated a restaurant to provide canteen services for his employees that was managed by his wife. The canteen provided special services for 10, 8, and 7 employees of Department A, Department B and Department C respectively. At the end of the year, the canteen still had an amount of GH 50,000 unpaid for cutlery, water bought from Special Ice Ltd., and other consumables.

(vii) The expenses incurred that are not directly traceable to a particular department are to be apportioned on the basis of sales and floor area occupied. Sales - wages, telephone bills, accountancy charges. Floor Area - rates and electricity, rent; Depreciation - 1:3:2

You are required:

i. To prepare Departmental income statement for the year ended 31st December, 2021.

ii. To prepare statement of financial position as at 31st December, 2021.

iii. Based on your knowledge in departmental accounts and the financial statements prepared in (i) and (ii), what are some observations or comments can you give Mr. Albert to assist him in making a decision on various departments, although all the managers were able to meet and exceed the minimum sales target of GH 4,500,000.