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please help me solve THEORY TYPE QUESTIONS QUESTION ONE The following trial balance extracts (i.e. it is not a complete trial balance) relate to Evening
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THEORY TYPE QUESTIONS QUESTION ONE The following trial balance extracts (i.e. it is not a complete trial balance) relate to Evening Class as at 30 June 2015: Ghs000 Ghs000 Revenue (note (i)) 194,590 Cost of sales 159,300 Research and development costs (note (11)) 14,040 Distribution costs 6,480 Administrative expenses (note (iv)) 12,240 Loan note interest and dividends paid (notes (iv) and (vii)) 7,000 250 Investment income 30.000 Equity shares of Ghsl each (note (vii)) 5% loan note (note (iv)) 25,000 7,200 Retained earnings as at 1 July 2014 4,500 Revaluation surplus as at 1 July 2014 10,500 Other components of equity 31,500 Property at valuation 1 July 2014 (note (iii)) 29,200 Plant and equipment at cost (note (iii)) 9,100 Accumulated depreciation plant and equipment 1 July 2014 Financial asset equity investments at fair value 1 July 2014 (note (v))10,800 The following notes are relevant: (i) Revenue includes a Ghs2 million sale made on 1 January 2015 of maturing goods which are not biological assets. The carrying amount of these goods at the date of sale was Ghs1.5 million. Moston is still in possession of the goods (but they have not been included in the inventory count) and has an unexercised option to repurchase them at any time in the next three years. In three years' time the goods are expected to be worth Ghs4 million. The repurchase price will be the original selling price plus interest at 12% per annum from the date of sale to the date of repurchase Evening Class commenced a research and development project on 1 January 2015. It spent Ghs1.2 million per month on research until 31 March 2015, at which date the project passed into the development stage. From this date it spent Ghs1.8 million per month until the year end (30 June 2015), at which date development was completed However, it was not until 1 May 2015 that the directors of Evening Class were confident that the new product would be a commercial success. Expensed research and development costs should be charged to cost of sales. (iii) Non-current assets: 3 THEORY TYPE QUESTIONS QUESTION ONE The following trial balance extracts (i.e. it is not a complete trial balance) relate to Evening Class as at 30 June 2015: Ghs000 Ghs000 Revenue (note (i)) 194,590 Cost of sales 159,300 Research and development costs (note (11)) 14,040 Distribution costs 6,480 Administrative expenses (note (iv)) 12,240 Loan note interest and dividends paid (notes (iv) and (vii)) 7,000 250 Investment income 30.000 Equity shares of Ghsl each (note (vii)) 5% loan note (note (iv)) 25,000 7,200 Retained earnings as at 1 July 2014 4,500 Revaluation surplus as at 1 July 2014 10,500 Other components of equity 31,500 Property at valuation 1 July 2014 (note (iii)) 29,200 Plant and equipment at cost (note (iii)) 9,100 Accumulated depreciation plant and equipment 1 July 2014 Financial asset equity investments at fair value 1 July 2014 (note (v))10,800 The following notes are relevant: (i) Revenue includes a Ghs2 million sale made on 1 January 2015 of maturing goods which are not biological assets. The carrying amount of these goods at the date of sale was Ghs1.5 million. Moston is still in possession of the goods (but they have not been included in the inventory count) and has an unexercised option to repurchase them at any time in the next three years. In three years' time the goods are expected to be worth Ghs4 million. The repurchase price will be the original selling price plus interest at 12% per annum from the date of sale to the date of repurchase Evening Class commenced a research and development project on 1 January 2015. It spent Ghs1.2 million per month on research until 31 March 2015, at which date the project passed into the development stage. From this date it spent Ghs1.8 million per month until the year end (30 June 2015), at which date development was completed However, it was not until 1 May 2015 that the directors of Evening Class were confident that the new product would be a commercial success. Expensed research and development costs should be charged to cost of sales. (iii) Non-current assets: 3Step by Step Solution
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