- 20 Marks
FR – L2 – Q66 – Presentation of Financial Statements
Question
The following trial balance has been extracted from the books of Kumasi Healthcare Limited, at 31 March 20X5.
| GH₵ 000 | GH₵ 000 | |
|---|---|---|
| Administrative expenses | 210 | |
| Share capital (ordinary shares of GH₵ 1 fully paid) | 600 | |
| Trade receivables | 470 | |
| Bank overdraft | 80 | |
| Income tax (overprovision in 20X4) | 25 | |
| Retirement benefit liability | 180 | |
| Distribution costs | 420 | |
| Non-current asset investments | 560 | |
| Investment income | 75 | |
| Plant and equipment | ||
| At cost | 750 | |
| Accumulated depreciation (at 31 March 20X5) | 220 | |
| Accumulated profit (at 1 April 20X4) | 240 | |
| Purchases | 960 | |
| Inventories (at 1 April 20X4) | 140 | |
| Trade payables | 280 | |
| Revenue | 1,950 | |
| Interim dividend paid | 20 | |
| 3,630 | 3,630 |
Additional information
(1) Inventories at 31 March 20X5 were valued at GH₵ 150,000.
(2) The following items are already included in the balances listed in the above trial balance.
| Distribution costs GH₵ 000 | Administrative costs GH₵ 000 | |
|---|---|---|
| Depreciation (for year to 31 March 20X5) | 27 | 20 |
(3) A final dividend of GH₵ 120,000 was proposed but not yet paid.
(4) The retirement benefit liability increased by GH₵ 16,000 during the year which has not been included in the trial balance.
(5) Income tax for the year is estimated at GH₵ 29,000.
Required
Prepare a statement of profit or loss (analysing expenses by function) for the year ended 31 March 20X5 and a statement of financial position at 31 March 20X5.
Answer
(a) Statement of profit or loss for the year-ended 31 March 20X5
| GH₵ 000 | |
|---|---|
| Revenue | 1,950 |
| Cost of sales (140 + 960 – 150) | (950) |
| Gross profit | 1,000 |
| Other operating income | 75 |
| Distribution costs | (420) |
| Administrative expenses (210 + 16) | (226) |
| Profit before tax | 429 |
| Income tax expense | (29) |
| Profit for the year | 400 |
(b) Statement of financial position at 31 March 20X5
| Assets | GH₵ 000 |
|---|---|
| Non-current assets | |
| Property, plant and equipment (750 – 220) | 530 |
| Investments | 560 |
| 1,090 | |
| Current assets | |
| Inventories | 150 |
| Trade receivables | 470 |
| 620 | |
| Total assets | 1,710 |
| Equity and liabilities | |
| Capital and reserves | |
| Share capital | 600 |
| Accumulated profits (240 – 120 + 400) | 520 |
| 1,120 | |
| Non-current liabilities | |
| Retirement benefit obligations (180 + 16) | 196 |
| Current liabilities | |
| Trade and other payables | 260 |
| Operating overdraft | 80 |
| Income tax payable (29 + 25) | 54 |
| 394 | |
| Total equity and liabilities | 1,710 |
- Tags: Financial Position, Financial Statements, Healthcare, Income Tax, Inventory, Profit or Loss, Trial Balance
- Level: Level 2
- Uploader: Samuel Duah