Goup JAN plc produces shampoo The following information is extracted from the bookkeeping records at 30 September 2020 Trial Balance 30 September 2020 Euro 000 Euro 000 Manufacturing equipment -cost 1900 Manufacturing equipment - Accum. depreciation 540 Share premium 1600 Loan (10% repayable 2025) 1200 Revaluation reserve 200 Vehicles cost 120 Vehicles - Accumulated depreciation 78 Provision for doubtful debts 20 Tax 7 Trade payables 660 Prepayments at 1 Oct. 2019 12 Fixtures -cost 8000 Fixtures - Accumulated depreciation 320 Distribution expense 632 Other incomes Admin expenses 1154 Bank/Cash 33 Share Capital (1 eur par value per 1 share) 3500 Dividend paid 200 Interest paid 60 Inventory at 1st October 2019 610 Retained earnings 974 Sales revenue 12000 Accrued expenses at 1 Oct. 2019 8 Disposal account 10 Purchases 6900 Trade receivables 1700 4 You are also provided with the following information 1. The loan was issued in Oct. 2019. Interest is payable half-yearly on 1 April and 1 Oct. The interest due on April 2020 was paid on the date due. Accrued interest at Sept. 2020 has not yet been accounted for. 2. The directors decided that a further 100.000 eur of TR should be written of and the provision for doubtful debts should be kept 3% of outstanding balance. 3. Auditors have audited the company and the total expense is estimated to be 80.000 eur. 4. On 13 September 2020, inventory was counted and valued at cost of 780,000 However, included in this inventory is old stock costing 70,000 which could be sold at 60% of its cost. 5. The balance of prepayments at 1st Oct 2010 refers to insurance charge. Prepaid insurance included in general distribution costs at 30 Sept.. 2020 accounted for 14,000 eur. 6. The balance of accrued expenses for 1 Oct. 2019 refers to accrued electricity expense. In the end of Sept. 2020 an electricity bill of 15,000 eur. The company classifies Heat and Light expenses under Admin Expenses. 7. The balance of tax account is the result of an over provision for the year ended Sept. 2019. The company's tax charge for the year to 30 Sept. 2020 has been estimated at 150,000 eur. 8. Depreciation is still to be calculated for the year on the following basis: Fixtures -2% per annum straight line Manufacturing equipment -10% per annum straight line Vehicles -25% per annum using reducing balance method A full year of depreciation is calculated in the year an asset ie acquired, and none in the year in which it is disposed of. 9. During the year, the vehicle that was purchased in Aug. 2017 for 30,000 euro was sold for 10,000 eur. The NBV of the vehicle was 13,000. No entries have been made in the books for this disposal, apart from recording the disposal proceeds. Required: Prepare the incomes statement for JAN plc. For the year ended 30 Sept. 2020 Also, prepare the Balance Sheet for this date. Show your working clearly 27 Marks Theoretical questions 1. Discuss how the choice of method of inventory evaluation (FIFO, AWC, and LIFO). illustrate your points. 2. What are the differences between the financial and managerial accounting? Discuss. Total: 4 Marks 4 Marks 35 Marks Goup JAN plc produces shampoo The following information is extracted from the bookkeeping records at 30 September 2020 Trial Balance 30 September 2020 Euro 000 Euro 000 Manufacturing equipment -cost 1900 Manufacturing equipment - Accum. depreciation 540 Share premium 1600 Loan (10% repayable 2025) 1200 Revaluation reserve 200 Vehicles cost 120 Vehicles - Accumulated depreciation 78 Provision for doubtful debts 20 Tax 7 Trade payables 660 Prepayments at 1 Oct. 2019 12 Fixtures -cost 8000 Fixtures - Accumulated depreciation 320 Distribution expense 632 Other incomes Admin expenses 1154 Bank/Cash 33 Share Capital (1 eur par value per 1 share) 3500 Dividend paid 200 Interest paid 60 Inventory at 1st October 2019 610 Retained earnings 974 Sales revenue 12000 Accrued expenses at 1 Oct. 2019 8 Disposal account 10 Purchases 6900 Trade receivables 1700 4 You are also provided with the following information 1. The loan was issued in Oct. 2019. Interest is payable half-yearly on 1 April and 1 Oct. The interest due on April 2020 was paid on the date due. Accrued interest at Sept. 2020 has not yet been accounted for. 2. The directors decided that a further 100.000 eur of TR should be written of and the provision for doubtful debts should be kept 3% of outstanding balance. 3. Auditors have audited the company and the total expense is estimated to be 80.000 eur. 4. On 13 September 2020, inventory was counted and valued at cost of 780,000 However, included in this inventory is old stock costing 70,000 which could be sold at 60% of its cost. 5. The balance of prepayments at 1st Oct 2010 refers to insurance charge. Prepaid insurance included in general distribution costs at 30 Sept.. 2020 accounted for 14,000 eur. 6. The balance of accrued expenses for 1 Oct. 2019 refers to accrued electricity expense. In the end of Sept. 2020 an electricity bill of 15,000 eur. The company classifies Heat and Light expenses under Admin Expenses. 7. The balance of tax account is the result of an over provision for the year ended Sept. 2019. The company's tax charge for the year to 30 Sept. 2020 has been estimated at 150,000 eur. 8. Depreciation is still to be calculated for the year on the following basis: Fixtures -2% per annum straight line Manufacturing equipment -10% per annum straight line Vehicles -25% per annum using reducing balance method A full year of depreciation is calculated in the year an asset ie acquired, and none in the year in which it is disposed of. 9. During the year, the vehicle that was purchased in Aug. 2017 for 30,000 euro was sold for 10,000 eur. The NBV of the vehicle was 13,000. No entries have been made in the books for this disposal, apart from recording the disposal proceeds. Required: Prepare the incomes statement for JAN plc. For the year ended 30 Sept. 2020 Also, prepare the Balance Sheet for this date. Show your working clearly 27 Marks Theoretical questions 1. Discuss how the choice of method of inventory evaluation (FIFO, AWC, and LIFO). illustrate your points. 2. What are the differences between the financial and managerial accounting? Discuss. Total: 4 Marks 4 Marks 35 Marks