Question Three The following trial balance relates to HIS GLORY LTD, a quoted company at 31" December 2007. CR DR GH¢ 130,000 GHe Land and buildings (1/1/07) Plant at cost 128.000 Depreciation of plant (1/1/07) 32,000 Investments 26,500 Cost of sales 89,200 Investment income 2,200 Distribution costs 11,000 Administrative expenses 12,500 Interest on loan paid 800 Inventory 31/12/07 37,900 Current Corporation Tax 400 Trade receivables 35,100 Revenue 180,400 Ordinary shares (issued at GH¢1 each) 60,000 Retained earnings (1/1/07) 25,500 2% loan (2005 –- 2010) 80,000 Trade payables 34,700 Revaluation surplus arising from land & building 14,000 Deferred tax provision (1/1/07) 11,200 Ассruals 24,000 Bank 6,600 471,000 471.000 The following notes are relevant: HIS GLORY LTD has a policy of revaluing its land and building at each year end. The valuation in the trial balance includes a land element of GH¢30,000. The useful a. life of the buildings at that date (1/1/07) was 20 years. On 31/12/07, a professional valuer valued the buildings at GH¢92,000 with no change in the value of the land. Depreciation of buildings is charged at 60% to cost of sales and 20% each to distribution costs and administrative expenses. b. During the year HIS GLORY LTD manufactured an additional plant for its operations. The details of the costs, which have been included in cost of sales in the trial balance, were: GH¢ Material Cost 6,000 Direct labour cost 4,000 Machine time cost 8,000 Directly attributable overheads 6,000 The manufacture of the plant was completed on 30/06/07 and the plant was brought into immediate use, but its cost has not yet been capitalized. All plants are depreciated at 12½% per annum (time apportioned where relevant) using the reducing balance method and charged to cost of sales. No non-current assets were sold during the year. c. The fair value of the investments held at 31/12/07 was GH¢27,100. d. The balance on taxation in the trial balance represents the over provision of the
Question Three The following trial balance relates to HIS GLORY LTD, a quoted company at 31" December 2007. CR DR GH¢ 130,000 GHe Land and buildings (1/1/07) Plant at cost 128.000 Depreciation of plant (1/1/07) 32,000 Investments 26,500 Cost of sales 89,200 Investment income 2,200 Distribution costs 11,000 Administrative expenses 12,500 Interest on loan paid 800 Inventory 31/12/07 37,900 Current Corporation Tax 400 Trade receivables 35,100 Revenue 180,400 Ordinary shares (issued at GH¢1 each) 60,000 Retained earnings (1/1/07) 25,500 2% loan (2005 –- 2010) 80,000 Trade payables 34,700 Revaluation surplus arising from land & building 14,000 Deferred tax provision (1/1/07) 11,200 Ассruals 24,000 Bank 6,600 471,000 471.000 The following notes are relevant: HIS GLORY LTD has a policy of revaluing its land and building at each year end. The valuation in the trial balance includes a land element of GH¢30,000. The useful a. life of the buildings at that date (1/1/07) was 20 years. On 31/12/07, a professional valuer valued the buildings at GH¢92,000 with no change in the value of the land. Depreciation of buildings is charged at 60% to cost of sales and 20% each to distribution costs and administrative expenses. b. During the year HIS GLORY LTD manufactured an additional plant for its operations. The details of the costs, which have been included in cost of sales in the trial balance, were: GH¢ Material Cost 6,000 Direct labour cost 4,000 Machine time cost 8,000 Directly attributable overheads 6,000 The manufacture of the plant was completed on 30/06/07 and the plant was brought into immediate use, but its cost has not yet been capitalized. All plants are depreciated at 12½% per annum (time apportioned where relevant) using the reducing balance method and charged to cost of sales. No non-current assets were sold during the year. c. The fair value of the investments held at 31/12/07 was GH¢27,100. d. The balance on taxation in the trial balance represents the over provision of the
Chapter1: Financial Statements And Business Decisions
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