- 20 Marks
FRPA – APRIL 2024 – L3 – Q1A – Preparation of Financial Statements for Vandee Oil Ltd
Using the provided trial balance and additional information on inventory, asset purchases, depreciation rates, utilities adjustments, and staff bonuses, prepare the Statement of Profit or Loss for 2023 and the Statement of Financial Position as at 31 December 2023.
Question
Vandee Oil Ltd. has been in business for the past ten (10) years. The following Trial Balance was extracted from the books of Vandee Oil Ltd. for the year ended 2023.
| Item | GH¢’000 (Debit) | GH¢’000 (Credit) |
|---|---|---|
| Bank | 46,200 | |
| Petty Cash | 4,000 | |
| Computer and Accessories | 8,370 | |
| Furniture and Fittings | 10,255 | |
| Land and Building | 214,000 | |
| Office Equipment | 12,250 | |
| Plant and Machinery | 239,400 | |
| Inventory | 1,900 | |
| Staff Loan | 5,088 | |
| Purchases | 355,000 | |
| Bank Service Charges | 1,300 | |
| Business Promotion | 1,500 | |
| Communication | 1,900 | |
| Insurance | 1,660 | |
| Licenses and Permits | 6,650 | |
| Medical Expenses | 155 | |
| Printing and Stationery | 300 | |
| Professional Fees: Legal Fees | 500 | |
| Repairs: Equipment Repairs | 2,600 | |
| Salaries | 23,050 | |
| Electricity | 780 | |
| Water | 280 | |
| Vehicle Running Expense | 4,560 | |
| Trade Payable | 25,000 | |
| Directors Current Account | 320,000 | |
| Computer and Accessories: Accumulated Depreciation | 3,348 | |
| Furniture and Fittings: Accumulated Depreciation | 2,050 | |
| Land and Building: Accumulated Depreciation | 8,560 | |
| Office Equipment: Accumulated Depreciation | 2,450 | |
| Plant and Machinery: Accumulated Depreciation | 47,880 | |
| Payroll Liabilities | 550 | |
| Retained Earnings | 49,282 | |
| Taxation | 3,003 | |
| Share Capital | 10,000 | |
| Sales | 574,145 | |
| TOTALS | 993,983 | 993,983 |
Additional Information: i) Closing Inventory as at December 2023 amounts to GH¢48,500,000 ii) The following assets were bought during the year 2023. However, these transactions were not recorded in the above Trial Balance:
- Computers and Accessories GH¢8,000,000
- Fixtures and Fittings GH¢5,000,000
- Plant and Machinery GH¢25,000,000 The following are the rates of Depreciation being used by the company, however Depreciation for 2023 is yet to be charged:
- Land and Building 1%
- Computers and Accessories 20%
- Furniture and Fittings 10%
- Plant and Machinery 20%
- Office Equipment 20% iii) Electricity stated in the Trial Balance include January 2024 Electricity Bill while that of Water represents six (6) months’ payment for the year 2023. iv) Staff bonuses amounting to GH¢15,000,000 was agreed on 31 December 2023 for staff. However, it was paid after the year end.
Find Related Questions by Tags, levels, etc.
Report an error
