Question 1

Question 1

P&L pro-forma

Answer 1

Revenue 
COS
Gross Profit
Administration costs
Distribution costs
Operating profit
Finance charge/cost
Profit before tax
Tax
Profit for year

Question 2

Changes in equity pro-forma (1)

Answer 2

SC SP RR RE TOTAL
Balance at beginning X X X X X
Issue of share capital X X X
Dividends (X) X
Total comp income X X X
Balance at end X X X X X

Question 3

Balance sheet pro-forma

Answer 3

Statement of financial position as at …

INTANGIBLE ASSETS
Development asset
ASSETS
Non current 
Land 
PPE

Current 
Inventories
Trade receivables 
Prepayment 
Cash/bank
TOTAL ASSETS

EQUITY AND LIABILITIES
Equity
Share capital
Share premium 
Revaluation reserve 
Retained earnings 

Non current
Long term borrowings
Deferred tax

Current assets 
Trade payables
Tax payable 
Interest payable 
Accruals 
Provision 
TOTAL EQUITY AND LIABILITIES

Question 4

Notes for balance sheet (1)

Answer 4

1. Operating profit is arrived at after charging
   Amortisation
   Depreciation
   Bad debt

2. Tax expense 
Transfer from deferred tax
Under/over provision from previous year
Tax for the year
Movement in deferred tax

3. Development asset
Balance at beg
Amortisation at beg
Amortisation for year
Amortisation at end
Value at end 

4. PPE
   Cost at beg
   Less disposal
   Cost at end

Accumulated depreciation at beg
Less disposal
Depreciation charge for year
Accumulated depreciation at end

NPV at end

5. Deferred tax
   Balance at beg
   Movement for year
   Balance at end

Question 5

Workings for balance sheet (1)

Answer 5

COS Admin Distrib
From TB X X X
Depreciation PPE X
Bad debt X
Loss on disposal X
Amortisation X
TOTAL X X X

Question 6

Notes for balance sheet (2)

Answer 6

1. Operating profit is arrived at after charging 
Depreciation
Staff costs
Remunerations
Research written off
Amortisation of development 

2. Tax
Transfer from deferred tax
Under/over provision from previous year
Tax charge for the year
Movement in deferred tax

3. PPE                   Buildings.        Equipment.        Total
Cost at beg
Dept at beg
Charge for the year
Depn at end
NBV at end

4. Inventory
   Raw materials
   Work in progress
   Finished goods
5. Deferred tax
   Bal at beg
   Movement for year
   Bal at end
6. Non current liabilities
   - the % debentures are redeemable in x years

Question 7

Workings for balance sheet (2)

Answer 7

Calc of COS:

• depn (building, machine, equip)
• manu wages
• hire of special equipment
• factory running costs
• purchases
• opening inv
• closing inv
• amortisation

Calc of distribution costs:

• sales salaries
• vehicle depn
• warranty

Calc of administration expenses:

• salaries
• research
• remuneration
• depn