Company Accounts Questions

The trial balance as at 31.03.
2015 of Wiskam PLC which trades electric equipment is given

below
Property, plant and equipment as at

01.04.2014
Land 16 000
Building 5 000
Motor Vehicle 4 200
Computer system 600
Accumulated depreciation on Property,
Plant
and Equipment as at 01.04.2014
Buildings 1 500
Motor Vehicles 1 260
Computer system 120
Sales 19 300
Cost of sales 12 000
Trade receivables 1 240
Tax paid 175
10% - Bank loan 1 200
Lease deposit account 300
Advertising expenses 200
Inventory as at 31.03.2015 (at cost) 350
Trade payables 1 650
Salary and wages 1 800
Stated Ordinary share capital 10 000
(500 000 shares per Rs 20)
Dividends paid 500
Revaluation reserve as at 01.04.2014 700
Retained earnings as at 01.04.2014 7 500
Discounts 50 120
Provision for doubtful debts as at 100
01.04.2014
Sales Commisions 20
Director’s fual and telephone allowncess 175
Aduit fee 60
Donations 30
Cash balance 895
Bank overdraft 145
43 595 43 595
Additional information :
Before preparing the financial statements for the year ending 31.03.2015 the following
adjustments have to
be made.
(i) The cost of inventory as at 31.03.2015 has been valued at First In First Out (FIFO)
method.
(ii) A debtor of Rs 80 000 from trade receivable amount as at 31.03.2015 was
bankrupted on 10.04.2015 and out of this amount only 50% could be recovered.
Further 10% on the remaining balance of trade receivable was decided to provide
as doubtful debts.
(iii) A agreement was signed with an advertising company for two years by the company
to promote the products on 01.01.2014. Rs 200 000 of paid amount for a period
of two years was recorded in the advertising expense account.
(iv) All property, plant and equipment should be depreciated 10% on cost based on
straight line method annually. All property, plant and equipment are used for
administrative purpose.
(v) Computers of Rs 400 000 which purchased on 01.10.2014 were recorded in the
purchase account.
(vi) A machine was acquired on 01.04.2014 under a finance lease for a period of 4
years. A down payment of Rs 300 000 was paid on this date and it has been
recorded in a lease deposit account. Annual lease installment of Rs 400 000
including of Rs 100 000 annual interest is to be paid at the end of each year. One
current year lease installment paid was debited into the bank loan account. The
bank loan was obtained on 01.01.2014.
(vii) It is reported that land revaluation loss of Rs 1 000 000 on 31.03.2015. because
there is a highway in front of the land but no entrance was to the highway in
near the land. The revaluation reserve consist of land revaluation surplus on
31.03.2010.
(viii) The building of the business was revalued for the first time on 31.03.2015 for it’s
fair value of
Rs 4 500 000.
(ix) It has been estimated that the income tax for the current year 2014/15 is Rs 220
000.
(x) The employer and employee contribution to the EPF are 15% and 10% on gross
salary and wages respectively and the employer contributes 3% to ETF. Only the net
amount after reducing emplayes. contribution has been recoded in salaries and
wages account.
(xi) It is decided to capitalized retained earnings 1/5th of the ordinary shares on
31.03.2015.
(xii) The following decisions have been made by the board of directors.
• To pay a dividend of Rs 1 500 000 to the ordinary share holders of the company.
• To Transfer Rs 300 000 for the general resurve.
Required :
The following financial statements (including notes) of Wiskam PLC for publishing :
1. Statement of profit or loss and other comprehensive income for the year ending
31.03.2015.
2. Statement of changes in equity for the year ending 31.03.2015
3. Statement of financial position as at 31.03.2015
Migara PLC a VAT registered company presents following Trial balance as at 31.03.2017
Dr Cr
Descriptio Rs.'00 Rs.
n 0 '000
Inventory as at 01.04.2016 400
Building rent 300
Property plant & Equipment 10500
Purchases 4400
Lease instalment Account 450
Trade receivables 2390
Distribution expenses 845
Administration expenses 1800
Tax paid 750
VAT on purchases & expenses 1100
Cash & cash equivalents 610
Sales 10100
Accumulated depreciation of PPE as at 01.04.2016 800
Land revaluation reserve 700
Provision for income tax as at 01.04.2016 130
Retained earnings as at 01.04.2016 2500
VAT on sales 1515
Stated capital – ordinary shares 6000
Right issue account 1800
23545 23545
Additional Information
Before preparation of the financial statements for the year ending 31.03.2017
adjustments for the following have to be made.
I. A sales invoice Rs. 115,000 with 15% VAT has been completely omitted from the books
II. As at 31.03.2017 the cost and the net realizable value of the inventory were Rs.
600,000 and Rs. 575,000 respectively. However, this inventory was sold before the
approval of financial statements at Rs. 550,000
III. The composition of property plant and equipment is as follows
Cost/value (Rs'000) Accumulated depreciation
as at 31.03.2017 as at 01.04.2016 (Rs.'000)
Land - at fair value 6000 -
Building 3000 600
Motor vehicle (leasehold basis) 500 -
Office equipment 1000 200
10500 800
Building and office equipments are depreciated on cost / value at 5% per annum
IV. The land and building was revalued on 31.03.2017 at Rs. 5,500,000 and Rs.
2,000,000 respectively by a professional valuer and not recorded in books.
V. The motor vehicle was acquired on 01.04.2016 at fair value Rs. 2,000,000 under a
finance lease. Paid Rs. 500,000 for down payment has been debited to motor
vehicle only. The lease period is 04 years and the useful life time is 05 years. The
ownership of the asset is not passed to the company at the end of the lease
period. Annual lease instalment of Rs. 450,000 is to be paid at the end of every
year with the interest. The current year's lease installment has been paid and
debited to the lease interest account only. Lease interest is as follows,
2016/2017 - Rs. 120,000 2018/2019 - Rs. 60,000
2017/2018 - Rs. 90,000 2019/2020 - Rs. 30,000
VI. The store complex of the company was shifted to a new premises on 01.012017 .
Annual rent was paid and it is represented in building rent account.
VII. The company's contribution for EPF and ETF has not yet been provided for the
current year. The company contributes for EPF and ETF at 15% and 3%
respectively on the gross salary of employees. Employees salary has paid by
deducting 10% employees contribution.
VIII. Paying annual employees salary Rs. 900,000 is included in administration expenses.
IX. Income tax paid during the year Rs.120,000 is related to the pervious year .It has been
estimated that the income tax for the current year is ¼ of the profit before tax.
X. It has been made a right issue on 31.03.2017 and the received cash has been
credited to right issue account
Required
The following financial statements (including notes) of Migara PLC for publication
as per LKAS 01. (Presentation of financial statements)
1) Statement of profit or loss and other comprehensive income for the year ending
31.03.2017
2) Statement of financial position as at 31.03.2017
3) Statement of changes in equity for the year ending 31.03.2017

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Company Accounts Questions

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The trial balance as at 31.03.

2015 of Wiskam PLC which trades electric equipment is given

Property, plant and equipment as at

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