Question
The following trial balance relates to Molly Ltd. at 31 December, 20X8: Dr Cr Revenue 50,000 Purchases 20,000 Research and development Distribution costs 2,400 8,000
The following trial balance relates to Molly Ltd. at 31 December, 20X8:
| Dr | Cr |
| ||
Revenue |
| 50,000 |
Purchases | 20,000 |
|
Research and development Distribution costs | 2,400 8,000 |
|
Administration costs | 15,550 |
|
Loan interest paid | 400 |
|
Non-current assets carrying value | 35,000 |
|
Trade receivable | 12,050 |
|
Trade Payable |
| 29,000 |
Inventory as at 1 January 20X8 | 8,000 |
|
Cash and cash equivalents | 8,100 |
|
Ordinary shares |
| 8,000 |
Share premium |
| 3,000 |
10% Loan notes |
| 8,000 |
Retained earnings at 1 January 20X8 |
| 11,500 |
| 109,500 | 109,500 |
|
|
|
The following is to be considered:
a). Land that cost 5,000 is to be revalued at 11,000. Depreciation for other non-current assets has been accounted for.
b) Closing inventory is valued at 16,000 at cost for the year. Included in this amount is inventory that cost 8,000 but during the inventory count it was identified that these goods had become damaged and as a result the selling price was reduced. The goods are now believed to have a selling price of 4,500 and will incur rectification cost of 500.
c). Research and development comprise research costs of 400 and development costs relating to a new product totaling 2,000. Production of this began on 30 September 20X8. Amortisation is to be charged at 4% a year.
d). During this year a piece of plant with carrying value of 3,500, met the criteria of IFRS5 Non-current Assets Held for Sale and Discontinued Operations. The plant is available for sale at the price of 3,200 and cost of 100 will be incurred in order to complete the sale.
Required:
1. Fill in the following blanks (Total 10 marks; 2.5 marks for each figure):
NUMBER FORMAT when inputting should be numerical only. Answer in whole numbers only, do not use text or symbols.
ACCEPTABLE NUMBER FORMATS ARE 10000
10000.00 will NOT be accepted as right answer
1). The ending balance of inventory after adjusting the damaged goods is:
.
2). According to IFRS5, the recoverable amount of the plant held for sale (note d) is
.
3). According to note c, the net book value of Development Expenditure in the Statement of Financial Position is
.
4). The Asset Revaluation Surplus relates to land is
Section B Question 11
Question 1
Question 11 (20 marks in total)
The following trial balance relates to Molly Ltd. at 31 December, 20X8:
| Dr | Cr |
| ||
Revenue |
| 50,000 |
Purchases | 20,000 |
|
Research and development Distribution costs | 2,400 8,000 |
|
Administration costs | 15,550 |
|
Loan interest paid | 400 |
|
Non-current assets carrying value | 35,000 |
|
Trade receivable | 12,050 |
|
Trade Payable |
| 29,000 |
Inventory as at 1 January 20X8 | 8,000 |
|
Cash and cash equivalents | 8,100 |
|
Ordinary shares |
| 8,000 |
Share premium |
| 3,000 |
10% Loan notes |
| 8,000 |
Retained earnings at 1 January 20X8 |
| 11,500 |
| 109,500 | 109,500 |
|
|
|
The following is to be considered:
a). Land that cost 5,000 is to be revalued at 11,000. Depreciation for other non-current assets has been accounted for.
b) Closing inventory is valued at 16,000 at cost for the year. Included in this amount is inventory that cost 8,000 but during the inventory count it was identified that these goods had become damaged and as a result the selling price was reduced. The goods are now believed to have a selling price of 4,500 and will incur rectification cost of 500.
c). Research and development comprise research costs of 400 and development costs relating to a new product totaling 2,000. Production of this began on 30 September 20X8. Amortisation is to be charged at 4% a year.
d). During this year a piece of plant with carrying value of 3,500, met the criteria of IFRS5 Non-current Assets Held for Sale and Discontinued Operations. The plant is available for sale at the price of 3,200 and cost of 100 will be incurred in order to complete the sale.
Required:
1. Fill in the following blanks (Total 10 marks; 2.5 marks for each figure):
NUMBER FORMAT when inputting should be numerical only. Answer in whole numbers only, do not use text or symbols.
ACCEPTABLE NUMBER FORMATS ARE 10000
10000.00 will NOT be accepted as right answer
1). The ending balance of inventory after adjusting the damaged goods is:
.
2). According to IFRS5, the recoverable amount of the plant held for sale (note d) is
.
3). According to note c, the net book value of Development Expenditure in the Statement of Financial Position is
.
4). The Asset Revaluation Surplus relates to land is
.
Question 2
2. Prepare the Statement of Profit and Loss for Molly Ltd. at 31 December, 20X8.
NUMBER FORMAT when inputting should be numerical only. Answer in whole numbers only, do not use text or symbols.
ACCEPTABLE NUMBER FORMATS ARE 10000
10000.00 will NOT be accepted as right answer
Statement of Profit and Loss
Revenue
Cost of Goods Sold ( )
Distribution Cost ( )
Administrative Cost ()
Research cost ()
Amortisation of Research cost ( )
Loan Interest ( )
Impairment Loss ( )
Net Profit
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