Question
Kaif LLC is involved in the manufacture of dairy products. It provides you the following details, you are required to prepare a Statement of Financial
Kaif LLC is involved in the manufacture of dairy products. It provides you the following details, you are required to prepare a Statement of Financial Performance clearly showing: 1. Net sales 2. Cost of Goods sold, 3. Gross profit, 4. Net income before interest and Tax, 5. Net income after interest and tax (7 marks)
Particulars | Amount(OMR) |
Opening stock | 6400 |
Rent(Dr.) | 2500 |
Expenses for production | 1800 |
Repairs to plant | 3500 |
Fire Insurance premium | 500 |
Bank Charges | 300 |
Wages and Salaries | 20,000 |
Selling Expenses | 950 |
Freight on Sales | 980 |
Printing and Stationery | 1420 |
Office Lighting | 600 |
Sales | 80,000 |
Purchases | 60,000 |
Return outwards | 3000 |
Tax | 40% |
Closing stock | 5240 |
After calculating the net income, consider the following information.
Kaif LLC has in issue 10% 1500 bonds having a par value of OMR 100 was issued at 10% discount.
It also has in issue 8% 50,000, Cumulative Preference shares issued at a premium of OMR 2 which has a face value of OMR 0.500
A. Comment and show how the net income of the company will be affected :( 1.5 marks)
a. Will there be any change in the net income due to the existence of bonds?
b. What will be effect on the net income or loss due to the Cumulative preference shares?
B. How will you show the Bonds and non-cumulative preference shares and any other item which can be included in the Statement of Financial Position (1.5 marks)
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