Leaving Cert Accounting FINAL ACCOUNTS - Company: Company Final Accounts

West Ltd

Question

Company Final Accounts

West Ltd. has an Authorised Capital of €1,600,000 divided into 1,100,000 Ordinary Shares at €1 each and 500,000 4% Preference Shares at €1 each.

The following Trial Balance was extracted from its books at 31/12/2011:

Buildings at cost (260,000) 800,000
Delivery Vans cost (260,000) 300,000
Discount (0) 10,400
Profit and Loss Balance 01/01/2011 10,000
Stocks on hand 01/01/2011 5,000
Debtors Interest for first four months 4% Investments 01/01/2011 300,000
Parents (comprising 3 months investment income) 1,444,700
Purchases and Sales (42,000) 23,300
Dividends paid 22,300
Bad Debts Provision (3,000) 3,000
Creditors (0) 82,000
Bank (some stocks) 31,000
Salaries and general expenses (including Suspense) 194,300 33,000
9% Debentures 180,000
Issued Share Capital - Ordinary Shares (700,000)

Issued Share Capital - 4% Preference Shares 180,000

Directors fees 40,200
Advertising 4,800
Capital Reserve 2,903,130 2,903,130

The following information and instructions are to be taken into account:

(i) Stocks at 31/12/2011 at cost were €21,200 - this figure includes damaged stock which costs €5,400 but which now has a net realisable value of €3,300.

(ii) Patients, which incorporated 3 months investment income, are for a year period commencing in 2011.

(iii) The suspense figure arises as a result of the incorrect figure for debenture interest (although the correct entry must be made, this account should also be adjusted).

(iv) The loan figure shown was taken from the bank account and should have been recorded in the Capital Reserve.

(v) The insurance premium amounted to €15,200.

(vi) The correct figure for the debentures is actually €180,000, the adjusted figure for the interest being charged to 2%.

(vii) The debenture payments include interest of 7%.

(viii) There is a bad debt of €600 which has not been considered in the profit and loss account.

(ix) Interest income is based on an investment balance of €600.

(x) Provision for depreciation of 2% of debtors.

You are required to prepare:

a) Trading and Profit and Loss Account for the year ended 31/12/2011.

b) Balance Sheet as at 31/12/2011.

Company Final Accounts West Ltd - Leaving Cert Accounting - Question 1 - 2012

Worked Solution & Example Answer:Company Final Accounts West Ltd - Leaving Cert Accounting - Question 1 - 2012

a) Trading and Profit and Loss Account for the year ended 31/12/2011

Sales

Calculation of Cost of Sales

Gross Profit

Operating Expenses

Total Administration Expenses

Net Profit

Final Summary

b) Balance Sheet as at 31/12/2011

Assets

Non-Current Assets

Current Assets

Total Assets = Non-Current Assets + Current Assets = €1,095,700 + €313,948 = €1,409,648

Liabilities

Current Liabilities

Long-term Liabilities

Total Liabilities = Current + Long-term Liabilities = €301,512 + €180,000 = €481,512

Capital and Reserves

Total Capital = €700,000 + €180,000 + €86,500 = €966,500

Finally, the Balance Sheet is balanced!

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