Question No. 01 (10 Marks) The following balances have been extracted from the books of MM Plc on 31 July2020. From them calculate the required value given at the end for the year ended 31 July 2020.

Purchases 1,400,000

Sales 1,900,000

Returns inwards 29,000

Returns outwards 57,000

Carriage inwards 11,000

Wages productive 110,000

Discounts allowed 11,000

Discounts received 15,000

Stock 31 July 2019 320,000

Wages and salaries: Sales and distribution 41,000

Wages and salaries: Administrative 62,000

Motor expenses: Sales and distribution 26,000

Motor expenses: Administrative 8,000 General distribution expenses 7,000

General administrative expenses 6,000

Rent and business rates (see Note (c)) 17,000

Directors remuneration 35,000

Profit and loss account: 31 July 2019 141,000

Advertising 19,000

Bad debts 3,000

Hire of plant and machinery (see Note (b)) 14,000

Motor vehicles at cost:

Sales and distribution 45,000

Administrative 18,000

Plant and machinery: Distribution 13,000

Debenture interest payable 7,000

Income from shares in group undertakings 8,000

Income from shares in undertakings in which the company has a participating interest 5,000

Preference dividend paid 20,000

Profit on disposal of investments 14,000

Tax on profit on disposal of investments 3,000

Ordinary dividend paid 110,000

Notes:

(a) Stock at 31 July 2020 313,000

. (b) The hire of plant and machinery is to be apportioned: productive 10,000, administrative 4,000

. (c) Rent and business rates to be apportioned: distribution 3/5, administrative 2/5.

(d) Motors are to be depreciated at 301/3 per cent on cost; plant and machinery to be depreciated at 12 per cent on cost.

(e) Auditors remuneration of 15,000 to be accrued.

(f ) Corporation tax on profit from ordinary activities for the year is estimated at 30,000, excluding tax on disposal of investments.

(g) Transfer 50,000 to general reserve. Required: Calculate the following values and shows your working. Working is mandatory.

answers required

(a) Cost of Goods Sold.

(b) Gross Profit

(c) Total Distribution Expense

(d) Total Administration Expense

(e) Operation Income

(f) Profit after tax

(g) Retain Profit/Loss .