DM Plc. is a quoted with an authorized share capital of 500,000, consisting of ordinary shares of no-par value. Below are the extracted balances of DM company for the year ended 31st December, 2019.

GH000

Purchases 5,848 Revenue 9,824 Returns inwards 432 Returns outwards 148 Carriage inwards 56 Wages and salaries (see Note (ii)) 544 Rent and business rates (see Note (iii)) 60 General distribution expenses 112 General administrative expenses 96 Discounts allowed 144 Retained profits as at 31 Dec. 2020 408 Inventory 336 Bad debts 20 Loan-note interest 48 Motor expenses (see Note (iv)) 54 Interest received on bank deposit 24 Income from associates and joint ventures 12 Motor vehicles at cost: Administrative 216

(4 marks) (3 marks) (2 marks) (2 marks) (6 marks)

Equipment at cost:

Royalties receivable Dividends paid

Additional information

Distribution 368 Administrative 60 Distribution 40

20 420

i. Inventory at 31 December 2020 is GH408,000.

ii. Wages and salaries are to be apportioned: distribution costs 1/4, administrative expenses

34

iii. Rent and business rates are to be apportioned: distribution costs 60%, administrative

expenses 40%.

3

iv. Apportion motor expenses in the proportions 2:3 between distribution costs and administrative expenses.

v. Depreciate motor vehicles 25% and equipment 10% on cost.

vi. Accrue auditors remuneration of GH44,000.

vii. Accrue corporation tax for the year on ordinary activity profits of GH1,456,000.

viii. A sum of GH 60,000 is to be transferred to general reserve.

Required;

From the above information, prepare a detailed statement of profit or loss for internal use, and a statement of profit or loss for publication and income surplus account. (20 marks)