Question
Question 5 The following information has been extracted from the books of Free Quote plc for the year to 31 March 2020. P000 Administrative expenses
Question 5
The following information has been extracted from the books of Free Quote plc for the year to 31 March 2020. |
|
| P000 |
Administrative expenses | 170 |
Interest paid | 5 |
Ordinary shares of P1 each | 200 |
Dividend | 6 |
Cash at bank and in hand | 9 |
Income tax | 10 |
Warranty provision | 90 |
Distribution costs | 240 |
Land and buildings: | |
at cost (Land P110 000, building P100 000) | 210 |
accumulated depreciation (at 1 April 2019) | 48 |
Plant and machinery: | |
at cost | 125 |
accumulated depreciation (at 1 April 2019) | 75 |
Retained earnings (at 1 April 2019) | 270 |
10% Loan (issued in 2017) | 80 |
Purchases | 470 |
Sales | 1,300 |
Inventory (at 1 April 2019) | 150 |
Trade payables | 60 |
Trade receivables | 728 |
|
|
Additional information:
1. Inventory at 31 March 2020 was valued at P250, 000.
2. Buildings and plant and machinery are depreciated on a straight line basis (assume no residual value) at the following rates:
Buildings 5%
Plant and machinery 20%
3. The depreciation charges for the year to 31 March 2020 are to be apportioned as follows:
Cost of sales 60%
Distribution costs 20%
Administrative expenses 20%
4. Income taxes for the year to 31 March 2020 are estimated to be P135, 000.
5. The 10% loan was issued in 2017 and is repayable in five years.
6. The year-end provision for warranty claims has been estimated at P75, 000. Warranty costs are charged to administrative expenses.
Required:
- a) Prepare Free Quote plcs statement of profit and loss for the year ended 31 March 2020 and; (10 marks)
- b) The statement of financial position as at 31 March 2020. (10 marks)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started