Company Final Accounts including a Manufacturing Account Blenheim Ltd, a manufacturing firm, has an Authorised Capital of €800,000 divided into 500,000 Ordinary Shares at €1 each and 300,000 6% Preference Shares at €1 each - Leaving Cert Accounting - Question 1 - 2009

This indicates that the finished goods need to be assessed for impairment, and the carrying value must reflect the lower amount.

Annual amortization expense for the patents would be calculated by dividing the initial value by the number of years, which equates to 1/6 of the value annually.

If sales are €1,085,000, the selling expense would be calculated as 3% of that amount.

Selling expense = 0.03 x 1,085,000 = €32,550, but since it exceeds €7,500, the limit of €7,500 applies.

For debtors amounting to €56,000, the provision for bad debts would be calculated as 10% of €56,000, resulting in a bad debts expense of €5,600.

The depreciation and the bad debts should be reflected in the financial statements as expenses, reducing net income.

Dividends on ordinary shares would be calculated at 10% of €350,000, which equates to €35,000 and on preference shares at €300,000 yielding an expense of €18,000.

The annual depreciation on the factory building would be calculated as 10% of €600,000, resulting in an expense of €60,000.

The annual depreciation will be €239,000 / 10 = €23,900 per year, impacting the profit and loss account for the year.

The final account should summarize revenues and expenses, showing the manufacturing profit, operational profit, and net profit, alongside the balance sheet reflecting the assets and liabilities.