1 Introduction to published accounts Chapter learning objectives

Introduction to published accounts

Workings:
(W1) Cost of sales
$
Opening inventory 140
Purchases 1,260
Closing inventory (95 – 10) (85)
Depreciation: plant & machinery (W2) 69
Depreciation: building (W2) 5
–––––
Total 1,389
–––––
(W2) Property, plant and equipment

Land Buildings
Plant &
machinery Total
$000 $000 $000 $000
Cost 380 100 400
Accumulated
depreciation (30) (170)
––––
230
Revaluation 100
Depreciation charge
100 × 5% (5)
230 × 30% (69)
–––– –––– –––– ––––
Carrying amount c/f 480 65 161 706
–––– –––– –––– ––––
Note that the only use of the total column is to calculate the total
carrying amount to enter onto the statement of financial position, any
other totals are unnecessary. Similarly the only subtotal needed is for
plant and machinery, where the subtotal is used to calculate
depreciation.

20 KAPLAN PUBLISHING

Chapter 1

^Test^y^our understanding 2

P Statement of profit or loss and other comprehensive income for the year ended 31 March 20X1 $000 Revenue 5,300 Cost of sales (1,350) ––––– Gross profit 3,950 Distribution costs (370) Administration expenses (490) ––––– Profit from operations 3,090 Income from investments 210 Finance cost (190) ––––– Profit before tax 3,110 Income tax expense (470) ––––– Profit for period 2,640 Other comprehensive income – ––––– Total comprehensive income for the period 2,640 –––––