Swac Ltd Case Study

CASE STUDY 1 – PREPARATION OF FINANCIAL STATEMENT

SWAC LTD

Statement of Profit or Loss Account for the year ended 31st Oct, 2013

$’000

Revenue 1,800

Cost of sales (W1) (1,284)

Gross profit 516

Administrative expenses (W2) (341)

Profit for the year 175

SWAC LTD

Statement of Financial Position as at 31st Oct, 2013

ASSETS $’000 $’000

Tangible non-current assets (W3) 731

Current Assets

Inventory 75

Trade receivables (W4) 304

Cash 20

Total current assets 399

Total Assets 1,130

EQUITY AND LIABILITIES

Equity

Share capital 415

Share premium 80

Retained earnings (W5) 305

Total Equity 800

Current Liabilities

Trade payables 250

Accrued energy cost (W2) 10

Bank overdraft 70

Total current liabilities 330

Total Equity and Liabilities 1,130

WORKINGS

1. Cost of sales

$’ 000

Opening inventory 160

Add net purchases 1,140

1,300

Closing inventory (75)

1,225

Add depreciation on plant & building (W3) 59

1,284

2. Administrative Expenses

$’ 000

As per TB 325

Allowance for receivables: 5% X 320 16

Less allowance for receivables at Nov 1, 2012 (10)

331

Add accrued energy cost 10

341

*Accrued energy cost : 2/3 X 15 = $10

3. Depreciation

$’ 000

Plant: (220 – 110) X 20% 22

Building: 740 X 5% 37

Total depreciation charge for the year 59

Tangible non-current asset schedule

Cost Acc. Dep NBV

$’ 000 $’ 000 $’ 000

Plant 220 132 88

Building 740 97 643

960 229 731

4. Trade Receivables

$’ 000

As per TB 320

Allowance for receivables (W2) (16)

304

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