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4.1 Prepare the Income Statement - NSC Accounting - Question 4 - 2016 - Paper 1
Question 4
4.1 Prepare the Income Statement. 4.2 Prepare the Note to the Balance Sheet for Trade and Other Receivables. INFORMATION: Extract from Pre-adjustment Trial Balanc... show full transcript
Worked Solution & Example Answer:4.1 Prepare the Income Statement - NSC Accounting - Question 4 - 2016 - Paper 1
Step 1
Prepare the Income Statement
Answer
Musica Limited Income Statement for the year ended 31 December 2015
Income
- Sales: 8,412,000
- Other Income: 64,140
Cost of Sales
- Cost of Sales: 4,595,000
- Debtors' Allowances: 112,000
Total Cost of Sales
- Total: $4,707,000
Gross Profit
- Gross Profit: $3,705,000
Operating Expenses
- Sundry Expenses: 257,400
- Bank Charges: 41,005
- Audit Fees: 15,400
- Repairs and Maintenance: 113,500
- Director's Fees: 736,000
- Salaries and Wages: 1,020,000
- Bad Debts: 20,675
- Provision for Bad Debts Adjustments: 7,800
- Trading Stock Deficit: 7,800
- Depreciation: 30,000
Total Operating Expenses
- Total: $2,775,000
Operating Profit
- Operating Profit: $1,030,000
Other Income/Expenses
- Interest Income: 3,000
- Interest Expense: (40,000)
Net Profit Before Tax
- Net Profit Before Tax: $3,057,800
Income Tax
- Income Tax: (300,300)
Net Profit After Tax
- Net Profit After Tax: 757,500
Step 2
Prepare the Note to the Balance Sheet for Trade and Other Receivables
Answer
Note to the Balance Sheet for Trade and Other Receivables
- Debtors' Control: 125,000
- Provision for Bad Debts: (8,000)
- Accrued Income/Receivable: 110,900
- SARS – Income Tax: 134,120
Total Trade and Other Receivables
- Total: 361,120