NSC Accounting Analysis and interpretation of Financial Statements: 4.1 Prepare the Income Statement

Question

4.1 Prepare the Income Statement.

4.2 Prepare the Note to the Balance Sheet for Trade and Other Receivables.

Extract from Pre-adjustment Trial Balance on 31 December 2015:

Balance Sheet Accounts Section
Debit	Credit
Ordinary share capital	3 000 000
Retained income (1 January 2015)	628 000
Loan from Paris Bank	540 000
Debtors' control	125 000
Creditors' control	96 200
Provision for bad debts	7 150
Trading stock	376 000
SARS: Income tax	315 000

Nominal Accounts Section
Sales	8 412 000
Cost of sales	4 595 000
Debtors’ allowances	112 000
Sundry expenses	
Bank charges	41 000
Audit fees	13 000
Packing materials	15 400
Repairs and maintenance	113 500
Director's fees	736 000
Salaries and wages	1 020 000
Employer's contributions	156 000
Bad debts	20 675
Provision for bad debts adjustments	
Trading stock deficit	7 800
Depreciation	30
Operating profit	
Interest income	3 000
Profit before interest expense	
Interest expense	
Income tax	
Net profit after tax

Item	Amount (ZAR)
Sales	8 412 000
Cost of Sales	4 595 000
Gross Profit	3 817 000
Other Income	64 140
Total Revenue	3 881 140
Operating Expenses
Sundry Expenses	257 400
Bank Charges	41 000
Audit Fees	13 000
Packing Material	15 400
Repairs and Maintenance	113 500
Director's Fees	736 000
Salaries and Wages	1 020 000
Employer's Contributions	156 000
Bad Debts	20 675
Provision for Bad Debts Adjustments	7 150
Trading Stock Deficit	7 800
Depreciation	30
Total Operating Expenses	2 775 000
Operating Profit	1 106 140
Interest Income	3 000
Profit Before Interest Expense	1 109 140
Interest Expense	(40 000)
Net Profit Before Tax	1 069 140
Income Tax	(300 300)
Net Profit After Tax	768 840

Item	Amount (ZAR)
Debtors' Control	125 000
Provision for Bad Debts	(8 000)
Accrued Income/Receivable	11 900
SARS Income Tax	134 120
Total Trade and Other Receivables	262 120

Item	Amount (ZAR)
Debtors' Control	125,000
Provision for Bad Debts	(8,000)
Accrued Income/Receivable	11,900
SARS - Income Tax	134,120
Total Trade and Other Receivables	262,120

4.1 Prepare the Income Statement - NSC Accounting - Question 4 - 2016 - Paper 1

Worked Solution & Example Answer:4.1 Prepare the Income Statement - NSC Accounting - Question 4 - 2016 - Paper 1

Prepare the Income Statement.

MUSICA LIMITED

Income Statement for the Year Ended 31 December 2015

Note to the Balance Sheet for Trade and Other Receivables

Prepare the Note to the Balance Sheet for Trade and Other Receivables.

Note to the Balance Sheet for Trade and Other Receivables

Join the NSC students using SimpleStudy...