Topic: Financial Statements Preparation

Search 500 + past questions and counting.

  • Filter by Professional Bodies

  • Filter by Subject

  • Filter by Series

  • Filter by Topics

  • Filter by Levels

  • 15 Marks

FA – May 2012 – L1 – SB – Q6 – Financial Statements Preparation

Prepare Statements of Affairs for two years and calculate opening capital, net worth, and profit.

Fortward Geso Trading Store maintained a single-entry system. The following information was extracted from the records:

Year Ended 31 December 2011 31 December 2010
Accrued expenses 10,000 —
Accounts receivable 196,000 130,000
Prepaid expenses — 16,000
Bank balances (40,000) 200,000
Investment 500,000 —
Cash balance 366,000 106,000
Accounts payable 74,000 90,000
Land and buildings 1,500,000 1,500,000
Delivery van 260,000 260,000
Inventories 190,000 74,000
Loan from bank 300,000 300,000

The following additional information was also made available in respect of the 2011 accounting year:
(i) Provision for doubtful debts should be made for N3,000.
(ii) Depreciation is to be provided on book value as follows:
(a) Land and buildings 5%
(b) Delivery van 10%
(iii) Additional capital of N250,000 was introduced into the business during the year.
(iv) The owner of the store withdrew a total sum of N20,000 during the year.

You are required to:
Prepare the Statements of Affairs of Fortward Geso Trading Stores for the two years to show:
(a) The opening capital (6 Marks)
(b) Net worth of the business (6 Marks)
(c) Profit (3 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – May 2012 – L1 – SB – Q6 – Financial Statements Preparation"

  • 20 Marks

FA – Nov 2020 – L1 – SB – Q1 – Financial Statements Preparation

Prepare the manufacturing account and the statement of profit or loss for a family business.

Sweetberry Manufacturing Company is a family business that produces and sells pure water in Lagos. In the year ended October 31, 2019, the following balances were extracted from the company’s ledger accounts:

Item N’000
Revenue 900,000
Raw materials purchased 180,000
Raw materials carriage expenses 8,000
Carriage outwards 4,000
Wages: Machine operators 184,800
Wages: Factory supervisors 45,000
Salary: Administrative staff 124,000
Salary: Sales and marketing staff 104,000
Distribution cost 4,000
Administration expenses 15,500
Rent and rates 58,000
Utility 6,000
Insurance 9,500
Sales promotion expenses 20,000
Discount received 6,000
Factory plant and machinery 72,000
Office equipment 20,000
Delivery van 36,000
Inventories as at Nov 01, 2018:
– Raw materials 34,000
– Work-in-progress 21,000
– Finished goods 40,000
Inventories as at Oct 31, 2019:
– Raw materials 29,000
– Work-in-progress 32,000
– Finished goods 50,000

The following information is also relevant for the preparation of the financial statements:

(i) Straight line depreciation policy at the following rates:

  • Factory plant and machinery: 10%
  • Office equipment: 10%
  • Delivery van: 20%

(ii) General expenses are to be apportioned as follows:

Expense Item Factory (%) Administration (%)
Rent and rates 80 20
Insurance and utility 75 25

(iii) Insurance prepaid amounted to N1.5 million

(iv) Accrued administration expenses amounted to N500,000

Required:

Using the vertical format, prepare the manufacturing account and the statement of profit or loss for the year ended October 31, 2019. (20 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2020 – L1 – SB – Q1 – Financial Statements Preparation"

  • 1 Marks

FA – Nov 2020 – L1 – SA – Q2 – Financial Statements Preparation

Difference between an income statement and an income and expenditure account.

The difference between an income statement and an income and expenditure account is that:
A. An income and expenditure account is another name for an income statement.
B. An income statement is prepared for a business while an income and expenditure account is prepared for a not-for-profit organization.
C. An income statement is prepared for a business while an income and expenditure account is prepared on a cash flow basis.
D. An income statement is prepared on an accrual basis while an income and expenditure account is prepared on a cash basis.
E. An income statement is prepared for a manufacturing business while an income and expenditure account is prepared for a non-manufacturing business.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2020 – L1 – SA – Q2 – Financial Statements Preparation"

  • 15 Marks

FA – Nov 2012 – L1 – SB – Q4 – Financial Statements Preparation

Prepare a bank cash book, retained earnings, and statement of financial position for Fehintola Enterprises.

On 1 January 2011, Mrs. Fehintola decided to invest her retirement benefit of N1,000,000 in the wholesale business of Fehintola Enterprises. She lodged the amount into the business bank account and paid for the following by cheque:

  • Motor Van: N600,000
  • Warehouse fittings: N340,000
  • Rent: N12,500

Proper accounting records were not kept, but the financial position as at 31 December 2011 revealed the following:

  • Inventories of goods in the warehouse: N150,000
  • Trade receivables: N125,000
  • Cash at Bank: N751,750
  • Trade payables for supplies: N100,000
  • Accrued rent: N15,000

The following were paid for by cheque:

  • Electricity bill at N2,500 per quarter up to 31 March 2012
  • Suppliers: N1,500,000
  • Personal expenses: N150,000

On 31 December 2011, it was agreed that the Motor Van and Warehouse fittings should be valued at N560,000 and N320,000, respectively.

Required:

a. Prepare the Bank Cash Book (5 Marks)
b. Prepare a statement showing the retained earnings for the year ended 31 December 2011 (5 Marks)
c. Prepare the Statement of Financial Position as at 31 December 2011 (5 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2012 – L1 – SB – Q4 – Financial Statements Preparation"

  • 15 Marks

FA – Nov 2012 – L1 – SB – Q1 – Financial Statements Preparation

Explain the principles and prepare financial statements based on a construction contract.

Real Construction Company Plc. is a major construction company in Nigeria. It recognizes revenue on construction contracts by reference to the stage of completion of the contract. However, in certain circumstances, revenue is only recognized to the extent that it does not exceed recoverable contract costs.

The company is halfway through a contract to build a new overhead bridge at a contract price of N300 million.

Progress report on this contract as at 1 April 2011 is as follows:

  • Cumulative sales revenue recognized: N150 million
  • Cumulative cost of sales to date: N112 million
  • Profit to date: N38 million

The following information has been extracted from the accounting records as at 31 March 2012:

  • Total progress payment received for work certified as at 29 February 2012: N180 million
  • Total costs incurred to date (excluding rectification costs below): N195 million
  • Rectification costs: N17 million

Real Construction Company Plc. had received progress payments of 90% of the work certified as at 29 February 2012. The company surveyor estimated that the value of the further work to be completed during March 2012 would be N20 million.

At 31 March 2012, the estimated costs of uncompleted contract were put at N45 million.

The rectification costs were the costs incurred in widening the pedestrian access roads to the bridge, due to an error by the company’s architect when making the initial drawings.

The company calculates the percentage of completion of its contracts as the proportion of value earned to date compared to the contract price.

All estimates can be taken as reliable.

Required:

a. Briefly explain the principles underlying each of the two methods of recognizing revenue and describe the circumstances in which their uses are appropriate. (5 Marks)

b. Prepare extracts of the financial statements for the contract for the year ended 31 March 2012. (10 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2012 – L1 – SB – Q1 – Financial Statements Preparation"

  • 1 Marks

FA – Nov 2012 – L1 – SB – Q32 – Financial Statements Preparation

Calculate turnover based on the cost of goods sold and profit margin.

If the cost of goods sold is N315,060 and the profit margin is 25%, what is the turnover?

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2012 – L1 – SB – Q32 – Financial Statements Preparation"

  • 1 Marks

FA – Nov 2012 – L1 – SA – Q27 – Financial Statements Preparation

Identifying an application package with integrated accounting modules.

An application package in which the accounting modules are integrated when data are entered in one module, and all the other modules affected would be updated either automatically or by the user’s command is called:

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2012 – L1 – SA – Q27 – Financial Statements Preparation"

  • 1 Marks

FA – Nov 2012 – L1 – SA – Q21 – Financial Statements Preparation

Identifying the difference between purchase consideration and the value of total tangible assets.

The difference between the purchase consideration and the value of total tangible assets taken over is:

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2012 – L1 – SA – Q21 – Financial Statements Preparation"

  • 1 Marks

FA – Nov 2012 – L1 – SA – Q18 – Financial Statements Preparation

Identifying the effect of transferring manufactured goods at market value.

The effect of transferring manufactured goods at market value is that:

A. Profit is made on goods manufactured
B. Unsold stock of finished goods is carried at a value above cost
C. It encourages manufacturing of goods rather than being purchased
D. It encourages manufacturers to have good planning
E. Cost of goods produced can be reduced in order to increase sales

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2012 – L1 – SA – Q18 – Financial Statements Preparation"

  • 1 Marks

FA – Nov 2012 – L1 – SA – Q17 – Financial Statements Preparation

Determining the formula for calculating the cost of raw materials available for use.

The following is given in relation to raw materials:

O = Opening Inventory
P = Purchases
R = Purchases returns
C = Carriage
E = Excise duties
I = Import duties
Z = Closing Inventory

The cost of raw materials available for use is:

A. O + P + C
B. O + P + E + C – Z
C. O + P + C + I – R
D. O + P + C + R – Z
E. O + P + C – R

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2012 – L1 – SA – Q17 – Financial Statements Preparation"

  • 12 Marks

FA – May 2023 – L1 – SB – Q3a – Financial Statements Preparation

Identification and discussion of four measurement bases for elements of financial statements according to IASB's Conceptual Framework.

Identify and discuss the FOUR measurement bases for elements of financial statements, as contained in the International Accounting Standards Board’s (IASB’s) Conceptual Framework for Financial Reporting. (12 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – May 2023 – L1 – SB – Q3a – Financial Statements Preparation"

  • 20 Marks

FA – May 2023 – L1 – SB – Q2 – Financial Statements Preparation

Preparation of a statement of cash flows for Samu PLC using the indirect method.

Samu PLC is a listed company. The following financial statements of the company are available:

Statement of Profit or Loss for the Year Ended December 31, 2018:

N’m
Revenue 6,740
Cost of Sales (4,840)
Gross Profit 1,900
Income from Investment Property 60
Distribution Costs (120)
Administrative Expenses (350)
Finance Costs (50)
Profit Before Tax 1,440
Income Tax Expense (160)
Profit After Tax for the Year 1,280

Statement of Financial Position as at December 31:

2018 (N’m) 2017 (N’m)
Non-Current Assets:
Plant and Equipment 2,880 1,860
Investment Property 420 400
Current Assets:
Inventory 1,210 810
Trade Receivables 480 590
Bank 1,010 –
Total Assets 6,000 3,660
Equity:
Equity Share Capital of N0.50 each 2,000 600
Share Premium 750 50
Retained Earnings 1,440 1,310
Non-Current Liabilities:
8% Loan Notes 250 430
Current Liabilities:
Trade Payables 1,410 1,050
Bank Overdraft – 120
Income Tax Payable 150 100
Total Liabilities and Equity 6,000 3,660

Additional Information:

  1. An item of plant with a carrying amount of N240 million was sold at a loss of N90 million during the year. Depreciation of N280 million was charged on property, plant, and equipment in the year ended December 31, 2018. There were no sales of investment property during the year.
  2. Part of the 8% loan notes was redeemed during the year.
  3. There was an issue of shares for cash on June 1, 2018.
  4. Dividend was paid on September 1, 2018.

Required:

Prepare a statement of cash flows for Samu PLC for the year ended December 31, 2018, in accordance with IAS 7 Statement of Cash Flows, using the indirect method. (Total 20 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – May 2023 – L1 – SB – Q2 – Financial Statements Preparation"

  • 1 Marks

FA – May 2023 – L1 – SA – Q19 – Financial Statements Preparation

Calculating the tax expense to be charged to the statement of profit or loss based on given tax information.

A company’s tax liability at the beginning of the year was N420,000. Current tax for the year was N850,000. The tax charged for the previous year was underestimated by N14,200. During the year, a tax of N428,000 was paid by the company. How much tax should be charged to the statement of profit or loss for the year?

A. N413,800

B. N422,200

C. N835,800

D. N856,200

E. N864,200

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – May 2023 – L1 – SA – Q19 – Financial Statements Preparation"

  • 1 Marks

FA – Nov 2019 – L1 – SA – Q15 – Financial Statements Preparation-

Calculate the adjusted net profit after correcting an error related to motor van expenses.

Your company’s statement of profit or loss for the year ended October 31, 2019, showed a profit of N836,000. It was later discovered that N180,000 paid for the purchase of a motor van had been debited to the motor expenses account. It is the company’s policy to depreciate the motor van at 25% per annum on a straight-line basis, with full depreciation charged in the year of purchase.

What will be the net profit after adjusting for this error?

A. N656,100
B. N701,000
C. N791,000
D. N971,000
E. N1,016,100

 

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2019 – L1 – SA – Q15 – Financial Statements Preparation-"

  • 1 Marks

FA – Nov 2019 – L1 – SA – Q10 – Financial Statements Preparation-

Calculate the working capital of the business.

Calculate the working capital of the business.

The extract from the financial statements of Benchmark Ventures for the year ended September 30, 2019, is as follows:

  • Capital: N84,000
  • Net profit: N15,000
  • Drawings: N9,000
  • Cash and cash equivalent: N3,000
  • Accounts payables: N50,000
  • Inventory: N29,000
  • Accounts receivables: N35,000

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2019 – L1 – SA – Q10 – Financial Statements Preparation-"

  • 1 Marks

FA – Nov 2019 – L1 – SA – Q9 – Financial Statements Preparation

Calculate the current assets of the business.

Determine the amount of the current assets.

The extract from the financial statements of Benchmark Ventures for the year ended September 30, 2019, is as follows:

  • Capital: N84,000
  • Net profit: N15,000
  • Drawings: N9,000
  • Cash and cash equivalent: N3,000
  • Accounts payables: N50,000
  • Inventory: N29,000
  • Accounts receivables: N35,000

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2019 – L1 – SA – Q9 – Financial Statements Preparation"

  • 1 Marks

FA – Nov 2019 – L1 – SA – Q6 Financial Statements Preparation-

Identify which is not a component of financial statements under IAS 1

In accordance with IAS1-Presentation of Financial Statements, which of the following is not a component of financial statements?

 

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2019 – L1 – SA – Q6 Financial Statements Preparation-"

  • 1 Marks

FA – Nov 2019 – L1 – SA – Q5 – Financial Statements Preparation

Identify what a cash flow statement cannot reveal.

Which of the following information CANNOT be revealed by a statement of cash flow?

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – Nov 2019 – L1 – SA – Q5 – Financial Statements Preparation"

  • 1 Marks

FA – May 2016 – L1 – SA – Q15 – Financial Statements Preparation

A question on how to account for carriage inwards.

Carriage inwards are:
A. Credited to the cost of sales
B. Debited to the cost of sales
C. Credited to the profit or loss
D. Debited to the profit or loss
E. Debited to equity

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – May 2016 – L1 – SA – Q15 – Financial Statements Preparation"

  • 1 Marks

FA – May 2016 – L1 – SA – Q9 – Financial Statements Preparation

A question about determining the gross profit margin from a given mark-up rate.

A business marked up its cost by 50%. This would mean a gross profit of:
A. 66⅔% on the market price
B. 66⅔% on the selling price
C. 50% on the selling price
D. 33⅓% on the cost price
E. 33⅓% on the selling price

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FA – May 2016 – L1 – SA – Q9 – Financial Statements Preparation"

Elevate your professional expertise across key business domains with our comprehensive training programs

Our offerings

Contact Info

  • +233203701923
    +233543919232
  • info@knowsia.com

Customer

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope
Oops!

This feature is only available in selected plans.

Click here to view all plans

Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.

Login
Upgrade Plan

If you’re not subscribed to a plan, click on the button below to choose a plan

Subscribe to a plan