13 FINAL ACCOUNTS Sample Question Departmental Final Account € Buildings at Cost
Accumulated Depreciation 12% Investments 01/05/2012 Fixtures and Fittings
Accumulated Depreciation
Textiles Department Sales
Purchases Carriage In
Stock 01/01/2012
Grocery Department Sales
Purchases Carriage In
Stock 01/01/2012
Salaries and General Expenses Advertising
P & L 01/01/2012
Debtors and Creditors Insurance
Light and Heat
Provision for bad debts Dividends Paid 6% Debentures PAYE/PRSI Bank
Issued Capital 450,000 Ordinary Shares at €1 each 200,000 6% Preference Shares at €1 each
1,686,200
100,000 6,000
40,000
100,000 60,000 25,000 70,000 40,000 65,000
22,000
150,000 1,200
15,000
450,000 200,000
1,686,200
The following information and instructions are to be taken into account: (i) Textiles stock as on 31/12/2012 was €65,000 whilst groceries on the same date were €45,000. This figure for textiles includes old stock which cost €6,500 but now has a net realisable value of 70%.
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(ii) Non perishable groceries that were received on a sale or return basis were treated incorrectly as a credit purchase. The recommended retail selling price of these goods was €15,000. This was cost plus 20%.
(iii) The figure for bank in the Trial Balance has been taken from the company’s bank account. However, a bank statement dated 31/12/2012 has arrived showing a balance of €23,900. A comparison of the bank account and the bank statement has revealed the following discrepancies: 1) €3,000 investment Income was paid into the company’s bank account. 2) A credit transfer of €400 by a bankrupt debtor had been paid directly into the company’s bank account. This represents the first and final payment of 20c in every €1. 3) A cheque of €5,500 was issued for insurance.
(iv) Advertising includes an annual payment of €4,000 for the year ended 31/03/2013. (v) Provide for 3% depreciation on buildings at cost per annum. Buildings are to be revalued at €600,000 on 31/12/2012. (vi) Provide for 10% depreciation on fixtures and fittings of book value per annum. (vii) Use the most appropriate basis when allocating expenses to textiles and groceries. Note: floor space is to be divided 75% and 25% to textiles and groceries respectively.
(viii) In addition, provide for: a) Investment income and debenture interest due. b) Adjustment for bad debt to 4%.
You are required to prepare a: (a) Trading and Profit and Loss Account for each department and the company for the year ended 31/12/2012. [90 Marks]
(b) Balance Sheet as at 31/12/2012. [30 Marks] 204 40,000 2,000
400,000 5,200
48,000 200,000
500,000 100,000
90,000 18,000 600,000 € 25,000 120 Mark Question
Horgan Ltd has Authorised Capital of 500,000 Ordinary Shares of €1 each and 200,000, 6% Preference Shares of €1 each. Horgan Ltd is divided into two departments – Textiles and Grocery. The following balances were extracted from the books on 31/12/2012:
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