ACC20007, SEMESTER 2, 2016

Suggested Solutions for Review Question (Week 1 Tutorial)

Petronas Ltd
Income Statement for the year ending
31 December 2015

$ $
Revenue
Sales 1,700,000
less Sales returns 8,000
1,692,000

Less Cost of Goods Sold

Opening inventory 280,000
Purchases 900,000
1,180,000
less closing inventory 300,000
Cost of goods sold 880,000
Gross profit 812,000

Plus other revenues

Discount received 30,000
842,000

less Expenses

Selling Expenses
Wages & Salaries 160,000

Administration Expenses
Rates 40,000
Insurance 40,000
General expenses 10,000 90,000

Finance Expenses
Loan interest 8,000
Bad debts 10,000 18,000
268,000
Net profit 574,000

Note: Discount Received may be shown as a negative finance expense.

 Petronas Ltd
Balance Sheet
as at 31 December 2015

$ $ $
Current assets
Cash 4,500
Accounts Receivable 240,000
Inventory 300,000
Total current assets 544,500

Non current assets

Furniture & Fittings
Cost 400,000
Accumulated depreciation 200,000
200,000
Buildings
Cost 700,000
Accumulated depreciation 100,000
600,000
Land - cost 500,000
Total non-current assets 1,300,000
Total assets 1,844,500

Current liabilities
Bank overdraft 100,000
Accounts payable 120,000
Total current liabilities 220,000

Non current liabilities

Bank loan 320,000
Total non-current liabilities 320,000

Shareholders equity
Ordinary shares issued at $1 700,000
Retained profits 604,500
Total equity 1,304,500
Total equity and liabilities 1,844,500