Prepare the trading section of the income statement

Assignment Help Financial Accounting

Reference no: EM132651138

FINANCIAL ACCOUNTING

Task 1

"International Accounting Standards (IAS) has brought a sort of harmony among accountants from different corners of the world. Inaccurate financial reporting caused by the unethical or deceptive practices of a company's accountants can lead to loss of revenue through an exposed accounting scandal, or worse, corporate collapse."

Discuss.

Task 2

Details for receipts and issues of Gabriel Ltd for the year 2019 were as follows:

	Receipts	Issues
January	145 kgs @ $17
February	270 kgs @ $18
March		177kgs @ $25
April	232 kgs @ $19
June		134 kgs @ $25
August	246 kgs @ $20
November		212kgs @ $27
December	148kgs @ $ 21	169 kgs @ $30

(a) You are required to prepare profit statements for the year ending 31 December 2019 when stock is based on:
(i) FIFO method
(ii) AVCO method

(b) Discuss how inventory is valued according to IAS 2

Task 3

The Eastern Music Club produced the following receipts and payments summary for the year ended 31 March 2019.

Receipts:	$
Subscriptions	30 000
Sales of refreshments	50 000
Loan from bank	30 000
Income from concerts	116 800
Sale of surplus equipment	30 000

Payments:
Balance, 1 April 2018	12 000
Purchase of new equipment	10 000
Hire of hall for concerts	27 000
Printing	14 000
Equipment maintenance and repairs	8 000
Purchases of refreshments	23 000
Salaries	45 000
Cost of concerts	83 500
Sundry expenses	760
Sponsorship from banks	1 000
Balance, 31 March 2019	?

Additional information:

31 March 2018 31 March 2019

	$	$
Salaries in arrears	2 800	1 600
Subscriptions owing	1 600	2 600
Subscriptions prepaid	1 000	400

Printing accrued	2 600		2 800
Equipment (cost $200 000), at NBV	160 000		?
Food and drink inventory	15 400	13 200

The bank loan was received on 1 July 2018. Interest is charged at 12% per annum. No Interest had been paid by the year end.

The equipment sold was purchased on 1 June 2017 and had a NBV of $32 000.

Depreciation is provided at 20% on cost for equipment in use at the year end.

REQUIRED

(a) Prepare the trading section of the income statement for the year ended 31 March 2019.

(b) Prepare the income and expenditure account of the Eastern Music Society for the year ended 31 March 2019.

Attachment:- Financial Accounting.rar

Reference no: EM132651138

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