QUESTIONS ON PUBLISHED ACCOUNTS

Question 1 The following information has been extracted from the books of Picklette Ltd for the year to 31 March 20X9 Dr 000 170 5 6 9 10 90 240 210 48 125 75 270 80 470 1,300 150 728 2,123 60 -------2,123 Cr 000

Administrative expenses Interest paid Ordinary share capital 1 each Dividend Cash at bank and in hand Income tax Warranty provision Distribution costs Land and buildings: At cost (Land 110, Buildings 100) Accumulated depreciation (at 1 April 20X8) Plant and machinery: At cost Accumulated depreciation (at 1 April 20X8) Retained earnings (at 1 April 20X8) 10% loan Purchases Sales Inventory (at 1April 20X8) Trade payables Trade receivables

200

Additional information 1. Inventory at 31 March 20X9 was valued at 250,000. 2. Buildings and plant and machinery are depreciated on a straight-line basis (assuming no residual value) at the following rates: On cost: Buildings 5% Plant and machinery 20%

3. There were no purchases or sales of non-current assets during the year to 31 March 20X9. 4. The depreciation charges for the year to 31 March 20X9 are to be apportioned as follows: Cost of sales 60% Distribution costs 20% Administrative expenses 20% 5. Income tax is for the year 31 March 20X9 (at a rate of 30%) are estimated to be 135,000. 6. The loan is repayable in five years 7. The yearend provision for warranty claims has been estimated at 75,000. Warranty costs are charged to administrative expenses. Required Prepare Picklette plcs income statement for the year to 31 March 20X9 and a statement of financial position as at that date without accompanying notes.

CHAMBERLAIN The following trial balance relates to Chamberlain, a publicly listed company, at 30 September 2012: 000 000 Ordinary share capital 200,000 Retained earnings at 1 October 2011 162,000 6% Loan note (issued in 2010) 50,000 Deferred tax (note (iv)) 17,500 Land and buildings at cost (land element 163 million (note (i))) 403,000 Plant and equipment at cost (note (i)) 180,000 Accumulated depreciation 1 October 2011 buildings 60,000 Accumulated depreciation 1 October 2011 plant and equipment 60,000 Trade receivables 48,000 Inventory 1 October 2011 35,500 Bank 12,500 Trade payables 45,000 Revenue 246,500 Purchases 78,500 Construction contract balance (note (ii)) 5,000 Operating expenses 29,000 Loan interest paid 1,500 Interim dividend 8,000 Research and development expenditure (note (iii)) 40,000 841,000 841,000

The following notes are relevant: (i) The building had an estimated life of 40 years when it was acquired and is being depreciated on a straight-line basis. Plant and equipment is depreciated at 12.5% per annum using the reducing balance basis. Depreciation of buildings and plant and equipment is charged to cost of sales. (ii) The construction contract balance represents costs incurred to date of 35 million less progress billings received of 30 million on a two-year construction contract that commenced on 1 October 2011. The total contract price has been agreed at 125 million and Chamberlain expects the total contract cost to be 75 million. The company policy is to accrue for profit on uncompleted contracts by applying the percentage of completion to the total estimated profit. The percentage of completion is determined by the proportion of the contract costs to date compared to the total estimated contract costs. At 30 September 2012, 5 million of the 35 million costs incurred to date related to unused inventory of materials on site. Other inventory at 30 September 2012 amounted to 38.5 million at cost. The research and development expenditure is made up of 25 million of research, the remainder being development expenditure. The directors are confident of the success of this project which is likely to be completed in March 20X5. The directors have estimated the provision for income tax for the year to 30 September 2012 at 22 million. The deferred tax provision at 30 September 2012 is to be adjusted to a credit balance of 14 million.

(iii)

(iv)

Required: Prepare for Chamberlain: (a) an income statement for the year to 30 September 2012; and (b) a statement of financial position as at 30 September 2012 in accordance with International Financial Reporting Standards as far as the information permits. ( Note: A statement of changes in equity is NOT required.