- 15 Marks
FR – L2 – Q65 – Presentation of Financial Statements
Question
LORRY LIMITED
The trial balance of Lorry Limited at 31 December 20X4 is as follows.
| GH₵ in million | |
|---|---|
| Administration | 86 |
| 5 | |
| 918 | |
| 189 | |
| 175 | |
| 2,830 | |
| 20 | |
| 400 | |
| 18 | |
| 1,562 | |
| 3,304 | |
| 6,313 |
The following information is also relevant.
(1) Inventories on 31 December 20X4 amounted to GH₵127 million.
(2) Current tax of GH₵75 million is to be provided.
(3) The loan is repayable by equal annual instalments over three years.
Required
Prepare a statement of profit or loss (analysing expenses by function) for the year ended 31 December 20X4 and a statement of financial position as at that date.
Answer
LORRY LIMITED
Statement of profit or loss for the year-ended 31 December 20X4
| GH₵ in million | |
|---|---|
| Revenue | 3,304 |
| Cost of sales (2,542 + 118 – 127) | (2,533) |
| Gross profit | 771 |
| Other income | 20 |
| Distribution costs | (175) |
| Administrative expenses | (417) |
| Profit before tax | 199 |
| Income tax expense | (75) |
| Profit for the period | 124 |
Statement of financial position
As at 31 December 20X4
| Assets | GH₵ in million |
|---|---|
| Non-current assets | |
| Property, plant and equipment (2,830 – 918) | 1,912 |
| Intangible assets (26 – 5) | 21 |
| 1,933 | |
| Current assets | |
| Inventories | 127 |
| Trade and other receivables | 189 |
| Cash (89 + 2) | 91 |
| 407 | |
| Total assets | 2,340 |
| Equity and liabilities | GH₵ in million |
|---|---|
| Equity | |
| Share capital | 400 |
| Retained earnings (1,562 + 199) | 1,761 |
| 2,161 | |
| Non-current liabilities | |
| Long-term borrowings (18 x 2/3) | 12 |
| Current liabilities | |
| Trade and other payables | 86 |
| Current portion of long-term borrowing (18 ÷ 3) | 6 |
| Current tax payable | 75 |
| 167 | |
| Total equity and liabilities | 2,340 |
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