FINANCIAL ACCOUNTING ASSIGNMENT

Financial Accounting Assignment

Financial Accounting Assignment

Question No. 2: Extract the income statement and balance for the year from the following table.

£'000s

£'000s

Share capital 25p ordinary shares

12,000

Sales

191,000

Purchases

78,000

Stock as at 1 January 2009

7,800

Wages and salaries

6,600

Sundry expenses

2,500

Motor expenses

15,300

Insurance

2,500

Equipment at cost

72,000

Motor vehicles at cost

48,000

Provision for depreciation of equipment at 1 January 2009

14,400

Provision for depreciation of motor vehicles at 1 January 2009

24,000

Debtors

20,100

Cash

1,200

Creditors

16,500

Provision for doubtful debts at 1 January 2009

300

Long-term loan

20,000

Bank

6,800

Directors' remuneration

21,000

Rent

10,000

285,000

285,000

Income Statement and Balance Statement for the Year

Income Statement

20X9

 

 

Revenues

124,326.00

Other Income

4,586.00

Less Cost of Goods Sold

 

Begin. Inventory

12,128.00

+ Purchases

73,952.00

- End. Inventory

12,403.00

Cost of Goods Sold

73,677.00

 

 

Gross profit

55,235.00

Operating expenses:

 

Distribution Costs

1,000.00

Depreciation

 

Plant & Equipment

701.50

Administrative Expenses

58,845.00

Depreciation

 

Fixtures & Fittings

281.70

 

 

Profit/Loss before interest (EBIT)

(5,593.20)

Interest expenses

(63.00)

Loss before tax

(5,656.20)

Richard Plc has somewhat a small number of fastened costs, which encompass company's running expenditures, and other operational expenditures though their particulars have not been listed. The business has numerous full time person engaged and the laughable part is that though company's has been doing the greatest chunk of work company's has not been competent to make a optimistic takeaway income. Although the unwarranted tour costs are part of company's earnings and should be advised as drawings since company's is residing well past company's means at present.

The rudimentary ideas that can be made are:

Instead of marketing the goods in collections company's should try marketing them alone. One trades in collections either when the supply is going dead and wants to be unblocked or all in all it is a approach where the charges are expected to be worse to make it appealing for the customer.

Secondly the galleries are having a mark-up of 100-200 per hundred on the goods company's is marketing and since company's is paying out on wrapping as well and not being competent to retrieve it since the breakeven purpose only is a output of 300 bundles. So company's should use the finance that company's paid out on touring in promulgating online and by brochures and in papers and broadsheets and ascribe a higher mark-up so as to boost the profitability and do away with the intermediary. After all company's is the one authorised to expanded profits.

This way company's will not need to boost company's output that much and even if need arises company's can take in one surplus employee. Plus in case company's wants to boost company's can do that squatted at work and giving in the surplus 10 weeks that company's would be collecting by not travelling.

So the key to better achievement is dealing these actions crouched at household and chopping down on the charges for example the tour expenditures and the charges should be expanded because after all the end clientele is compensating twice of thrice the allotment of what Richard Plc is charging. There is no justification to trust that they will not pay for the matching product from ...