Partnership Accounts “=
at of Comprehensive Income
stem
rst 5 Statement of Comprehensive Income Account for the Pear ended at mu December 20...
ma £
ca Return inward =
o )
Nae ld aaa
Sind stock wae
pypurchase wae
cn a
‘Net purchase = on
“Goods or stock drawing aa
o es)
wae
(astage inward rrr
Evaluate the Position a ‘which purchased a building which it converted into
4% shopping centre with ten separate Ps.
Valid points may include:
Points for
* A very strong cash position * Further income and profit iftenth shop can berate |
Points against .
* Loss for the year * Building not fully occupied
NOT
* Total assets higher
> ae the owner’s decision to purchase the shop Premises as an alternative to renting
‘answers may include:
Points for
Will have ownership ‘Control of premises, without ‘having to seek landlord's Permission for renovations
* Security of tenure ‘Suaranteed
‘Siam "MS hettetnanpaet wane Price
q Tent
Points agai
{Malor capital outiay Con
anes . . werts a healthy cash balance into an overdraft
“ee {Cuil enployd increases and etn decrees
*Morebaats itenance of the Premises *More ion
NOT scoped * Burden of a bank loan
* More non-current Rssets
* More payment
for wiltes * Increased profit © Variable cost +. Fixed cost =
a Cost of production
bi unit manufactured ~Closing stock of finished goods =Total unit sold
° en Stock of finished goods = Average cost of production x Closing units of finished goods.
‘Osing stock is always valued at Cost of Production
Format of Manufacturing Account
Cory Manufacturing account for the year ended 31 December 20xx
= £ £ cml
Opening stock of raw materials = an
| (purchase of raw materials +8
(return outwards a (4) a8
(+)carriage inward im 7 ae ae
Total raw materials available for use bid
| ()stolen/damage/scrap materials a)
(closing stock of Raw Materials Sy
Raw Materials Consumed. 2%
(+)Factory direct expense:
Factory wages /Manufacturing Wages 8%
Royalties oe
| Licence fees way | ee 6 Basic A Level Accounting »% By- R-H- SHaKar
Direct labor cost
| Direct Fuel & Power
Direct Materials _
Any expenses with (Direct)
Prime cost
(+)Eactory Indirect/overhead Expenses
Factory supervisors salary
Factory rents and rates
Factory Insurance
fadirect labour
Factory hitting and lighting
Indirect materials
Factory production Manager’s salary
Depreciation: Machinery
Depreciation: Plant and power
Repair
Any other expenses related to manufacturing _
| () Sales of Scrap Materials
Work in progress
(Opening Work in Progress
Oclosing work in progress
COST OF PRODUCTION
@) Factory Profit /(-) Factory loss
Market Value / Transfer Price Manufacturing Accounts
__Inereasng the po
increased value | Cre
____ Decreasing the position
iitvibedeaease | Cray ee
X Company's Statement of Comprehensive Income for the _ ended
31 December 20xx
ei
+ i ~
Svar eurn
jt sales
‘ototzodald |
rang took of finished goods
“jc of production / arsed poe <=
{closing stock of finished goods amma ae
ymarehouse expense:
‘Warehouse wages we
‘Warehouse rent & rates
‘Ware house Heating & Lighting we
Gross profit
(Discount received.
(@)Bad debt recovered _ |
(@Rent received
| (#)Commission received
(+)Decrease in provision for bad debt
(Operating Expenses
‘Administration Expenses 7
Selling& Distribution expenses we
Carriage outwards _ we
Depreciation: office furniture We
Financial charges a
‘Any Expenses related to office se ml
Net Profit on trading, “
(4) Factory profit /(-) Factory toss “
| ©) Increase in provision for unrealised profit ve
|) Desease in provision for umealised prof _ ¥
Adjusted Net Profit, rena | age | ES |e
i 320 Basic A Level Accounting % By RH: SHaikyy
____ X Company's Statement of Financial P
‘Land & Building
Motor Vehicle/Delivery van ~
| Office funiture
| (+)Current Asset
Cash at Bank
Cash in Hand
Debtors credit customers
(©) provision for bad debts (ital)
Prepaid/advance expenses
Tasurance claim on damage stock
Tncome owing
Closing stock
Raw materials
Work in progress
Finished goods
(©) new provision for unrealized profit
Total Asset
Equity / Capital
Opening Capital i
(Bankcash(new capital)
Net profil(loss)
()Drawings(including goods taken by owners)
(+)Non Current liability
Bank Loan
Mortgage loan
(Current Liabilities
Creditor/eredit supplier/Account Payable
Bank OD
Owing/ Unpaid expense
Prepaid! advance income
Short term loan(repayable within | year)
Total Equity and Capital
wity / Capit Format of Job Costing Statement
Details . i
Direct materials
(+) direct labour : pee
Prime Cost ve
(+) Overhead Cost
Machine Cost Center ( absorption rate x machine hours used in the job)
Assembly cost centre ( absorption rate x direct labour hours used in the job)
Finishing cost centre ( absorption rate * direct labour hours used in the job) | ***
Total Cost of the job . ———
_ Form:
Daas
eee
at of Quotation of the job ‘unticked in the casit VCS
Deposit
_ | Bank Giro Credit
» | Insurance : |
» | Sales
» | Bank Charges ee
» | Direct Debit (DD) ae
* |, _| Standing Order 7“
» | Credit Transfer (CT) **4(Cr/ Di) cama o/d (0/d) oe
Bank Reconcif
[fstarts with the debit balance of the oe Statement
ited cash book .
(4) Unpresented Cheque
() Bank Lodgment
Balance as pet Bank Statement
1, ‘Hstarts with the credit balance of the updated cash book.
Details >
Bank Overdraft as per cash book £ £
0 Unpresented Cheque oy
[ (+) Bank Lodgment . aa Ti
Overdraft as per Bank Statement aCCOUrn,
and expenditure is merely another name for Profit and
t and expenditure : Income
a ceed trading concems like clubs, societies , hospitals etc.. This Aoount ig
with all earnings (both realizes and unrealized) and debited with all expenses ( both Paid ang oy
The difference represents asurplus of deficiency for a given period which is carrie tte Mi
account. It should be noted that items of receipts or payments of capital nature such 2 hy Sai
purchases or sales of any fixed assets must not be “Big
Statement of Comprehensive Income
Sales
Sales
(-) cost of goods sold
Opening stock
Add: purchase
Less: closing stock
Gross profit
Less: expenses
Relevant wages
[Any other Relevant Expense
[Profit or loss from bar or catering Income & Expenditure Account
Details
Income
Subscription (transfer to income and expenditure from subscription)
- By
Profit from bar or catering( from bar ‘or catering trading profit and loss
sccount.)
Gonapetition fees
Gain on sale of fixed asset
Donation received
Sales af dance ticket 1
| Tncome from events
Total income
(less) Expenses
Loss from sale of fixed asset
Toss from bar or catering (from bar or catering trading profit and loss
secount)
Toss from refreshment /ticket/daytrip/ dance expense
*
Donation paid
Scertarial expenses
Total expand
prs
Bad debts bess
Wages and salaries “
ix ve
Depreciation of fixed assets : ce
ae
Suplus) Deficit 7 ml
+08
+e 226 Basic A Level Accounting ™ By- RH: SHAIKAT
‘Statement of Financial Position
Land & Building
‘Motor van
eT
Details Cost
Fixed asset —
oS
Current asset «rN
| Subscription in arrear(balance c/d of subscription) a |
[Closing ventory de
[Bak a
Expenses prepaid ta
[Gah ae
ee aa
[ »
Cr
_ SSS ESS 3
jing accumulated fund, laa
“Add: surplus / (less) deficit =i
‘Current liabilities »
Sabscriplion received in advance (balance old of subseription)
Bank overdraft
Expenses owing,
iid income
a
‘Add: long term liabilities
Interest free loan
a
‘Bank loan
a
to tke credit for only those subscriptions which are relevant.
Subscription : . The members of the association , as per rules , are generally ‘Requied : w wm
‘annual subscription to enable it to serve the purpose for which it was created. It appeas w
receipt side of the receipt and payment account and is usually credited to income, Care must eax B
Subscription account
Date [ Details ‘Amount | Date | details ‘anal
Balance b/d (owing) cS ~ [Balance b/d(prepaid) wt
Income & Expenditure +e “| Bank Te
Bad debt cz
Balance o/d (prepaid) aa Balance o/d (owing) 4
wa 3
0
Balance b/d (owing) r aan Balance b/d (prepaid) [= = a Organizations
tement of Comprehensive
‘© cost of goods sold - . =
Opening stock
‘Add: purchase
Less: closing stock
profit or loss from bar or catering Basic A Level Accounting a. By- R-H- SHAIKAT
196
Obtaining cash or bank balance:
Cash book plays a very important role in solving incomplete records. Most of the businesses
keep proper records , at least maintain a receipt and payment account ees ne a
cash is paid and how much is received from different source of incomes. Many time cangi
require to find the closing cash balance to detennine current assets or overdraft as current fete eS,
Cash book lity
Balance b/d Balance b/d as
Sales Purchase ; i
ais Creditor : ; [ey
a Expense |
GS
aes esas |e eee |]
Feainesst Pn}
|
ae Repayment of loan D
ae ge ee PI
a A
= profit and’ toss account . It,
ee OMESNANCNB tO determine how much to transfer fo
‘wise ifyou prepare the expense and income account to adjust the actual
Expense A/C(owing)
Bank +44 | Balance bid “
Batanee elt +9 | Profit and loss ae we
one oe
Expense AIC(prepaid)
pam ove [Profit and loss we
= += Balance old
ae
Income A/C(owing)
Balance bid “ek Se
Profit and loss *° | Balance od a
mee +8
L
nm Income A/C(prepaid)
Profit and loss s+ | Balance b/d , ry
Balance cfd #7 | Bank
ae
1
To find out depreciation value from the fixed asset:
Fixed asset Ale
Balance b/d +## | Disposalisales of asset ae
Bank/ cash - *** | Depreciation ve |
Balance oid ee]
ry ae |
To find out beginning -capital of the year: —-
Allfixed asset +4 | Long term liabilities ey
Allcurrent assets e+ | Current liabilities “
—T ~
Total assets +44 | Total liabilities a
Capital total asset — total liabilities other related adjustments, Tp me’
wa wasie 4. Level tea
ae ven period. Cash sales fi
" gales for the Bt gure arg
eed Noy
indi nd figure you need 10 prepare a dap. aly
fg cash rer eral ccrodit sales
k and
eae are unknown, it can be ascertained from the total debtors account ,
items(available) of credit side and subtract all the items
[nan ese om Oe
(Cash received from ‘debtors
‘(Discount allowed to debtors I
(Return inward
‘(Debtors at the close of the year
book. boo a
from oa ing for obtain a
i meee in id He
we eceips from debtors
jer _| Return inward >
—}se4 | Discount allowed
zee_| Bad debts
qa | Bills receivable received
Set-off/contra (purchase ledger)
°
Balance o/d / closing balance
48 —
ithdrawn item from sales(drawings)
found in debit side. It can be doy,
ing
ro
D7
oD
D7
cn
cn
y
ry
© Debtors atthe beginning
Credit sales for the year
Abridged. Conversion:
Opening and closing debtor:
IFopening balance of sundry debtors are unknown we can calculate it by the following methods
Opening balance:
we
Cash received from debiors
‘(HBills receivable received
[(@Reunsiovar
(Discount allowed
(#)Bad debts
(#)Closing balance
(
| (Bills receivable dishonoured
Sh Saeeel
Opening balance of debtors
Tt
a
mw
we
et)
)
oo eemplate Records \
with patance of debtor ee 193
(pgm
(Oa evel from dé,
pill Gear ————~
posed
(pind debts =
Closing balance of debtors
jaged Conversions
ridged
fats eceivable
‘ls receivable are unknown the i
vias vi Same may be ascertained
re from the total debtors accou
Opening balance
(Credit sales -
(@Bills receivable dishonoured —ifany
(() cash received from debtors
()Retum inward
(Discount allowed
() Bad debts
(©) Closing balance
Bills receivable
Finding purchase figure:
This may include both cash and credit purchases for the given period . Cash purchased figures ate
normally given on the credit side of cash book. To obtain credit purchase figure you need to prepare a
creditors account using amount paid to supplier from cash book and other related adjustments,
Creditors AIC
" VPayments to ereditors a “ihe BD
Discount received *8* | Credit purchases ee
Bills payable granted a ‘+ | Bills payable dishonoured (if any) we
Return outward a
Se- offf contra( sales ledger) + ee |
Balance C/D / Closing balance
a
‘Total purchase = credit purchase + Cash purchase ic A Level Ac tin He
. Besic counting % BY RH. Shang,
crn Pies a nko, itn be ascertained fromthe otal ere,
u
Mean tac al ete oud increta dng eet A
net ree LOwir
e
eg
vy, ON,
a aN
(Cash paid to creditors
(a) Discount received
(#) Return outward
()Creditor_atthe close ofthe year /olosing balance
‘Qereditor atthe beginning opening balance
Credit purchase for the year
Opening and closing creditors:
Ifopening balance of sundcy creditors are
Opening creditors:
Cash paid to creditors
Bills payable granted
‘Ceash paid to creditors :
(Bills payable granted re
(Return outward iw
(Discount received *
closing creditors "
Abridged Conversion:
Bills payable:
{EBills payable are unknown the same way may be ascertained from the total creditor acon!
Opening balance 4
(Credit purchase 3
[Tw
aC
te
1
1
G
| (ills payable ihonowred =Hfany
[cash paidtocreditors
[Reta outwards
-)Discount received
tas bet
c 150.
Basic A Level Accounting % By RH: SHAIKAT
; 4 — X10
6. Mark up to Margin % 759 x *100 , Margin to Mark up% Top “x x100
Accounting ratios — Calculation sheet .
| Profitability Ratio
Ratio Formula Year j
Gross profit margin as a % of sales |_GP_ , 199 = x%
Sales
Gross profit mark-up asa %ofsales |__ GP___, 199 = x%
Cost of sales
Net profit margin asa % of sales | NP_. 199 -x%
Sales
Expenses as a % of sales Expenses 199 = X%
Sales
Return on capital employed (ROCE) ___ NP =
Capital Employed aa
Stock turnover, e.g. 5 times
Cost of Goods Sold _
Average Stock SS
foes)
Liquidity Ratio
Current (or working capital ratio)
Current Assets
Current Liabilities **!
Acid test (or quick ratio)
Current Assets — Stock
Curent Liabilities ~~"!
Debtors to sales ratio(for months)
{debtors’ collection period)
Creditors to purchases(for months)
(creditors’ payment period)
‘Or , Creditors to purchases (for days)
Debtors
Sales for year x 12=X Months
Creditors
Purchases for year ~ 12= X Months
Credit
rectors __ , 365 = X Days
Purchases for year patios ‘and Interpretation of Finanical Statements 149
‘Acid Test Ratio indicates the extent to which the
company could pay its current liabilities without having
relying on the sale of stocks, Stock is regarded as .
ai Teast liquid of all the current assets. Eliminating stock
8 from current assets provided the Acid test of whether the
‘company has sufficient resources (cash & debtors) to
settle its current liabilities . Stock is hard to convert into
‘cash in relatively short period
cent jon Period
(ection :
ei Temeasures the length the of time (number of days weeks
3 cor months) it takes to collect debts on average .It shows
| Debtors 965 4 how efficiently the business collect its debts. Businesses
|e 0dr Sls 1365 days | Spon vary in the amount of time they give customers to
pay for goods and services Det Period may be 30,6090
Dreven 120 days. However a business prefers a short tenn
debt collection period.
ave Nee Cstome's Colleton Period
rettors Payment Period
‘ ~_ Creditors
| Collection Period = Credit Purchase
< IE \Xx om ~
. Bal C
(dx
ot Ta |
Bal by
a
Hal BID
(gve)
cn |
By | Om
a ani
ae Exrene | 4a
Bal 94
(ogy)
(Je)
PAN a) Rank (ef
Aalc/d eS
7vel Ral
(adt) sales lesser contol AK
Yo) Dvd Bal 0/4 («1)
legit sales gan
Bank (ef Pisou
BDigoreuiape nen
CHRYR n| Rekuin, Fnwa
Tse get oft / ek toxenst
fyb vs Re" ws
CAI det AM -qonenton et
i ae ‘Lo (OG 3
avy ear vit ;
ne rot NN
conrcel
Plovison fof bad debt
+ S\(vin) —
WS (loss)
ol (/s Coss )
(Reteiabie-nis ga .
a 4
| el edset° conte) ie”
ee Beton Bal yy one ae
Owe) CIRO Pakage
Dig feceives | Rane (efung
GANS .
- Ga (7 |4 Bal VY — nalfonekuting
OPENING INRMOLY Of ow matin)
+) Py rl
CF) LIEN, oF low aks
) ClegiN® jnventoly fam
yea
QW arterials Concusey
(+) Manforcturing tear
t) OUcr/Pegtgiion)
(+) Roya ties) epee
PLM (Ost
(+) Facer owners
“FREE NIS OF AT
AOL 1@S EXCert |
SHR /AIME cob)
(4) Ofening werk in MaRS
(+) close wots in Regie
POQUEION (OS
“TRO Tonstel-
(4) syansfer Rie
rae Pri A 4
Byetation AVC
HA! CO!
\4) “Lavbeus (O54
G1) everhead cost
Total COst
(t Plotix(
COWING leuteg te
|: 40 gebk ferovery A
EIS (we) | RECivowle
(gan)
Flactuntiny catitoy a ( I
When A lovginess Jegsnt popes
N RPK CULleNK MOU hen
thy vill follow.on: iackuntirs of Feating
COPA AC All items: of coffent -evount will
be POE fo THE CAPln} oCOUNY in came cidke
Alone with cPltal account items
LHQ subctiption AVC
‘ uation pf
F/E BAI by valve of ain
annie ' AScers INCIRARS
ANE: t= ALY of Valve of
bl | (Aecques) VAbIAY) inbiney
| i Gain of IRLIQDEL
| _- Revaluation! Logs on
GOOINll AV. 1 (Prot folio) FeYoluna
‘ (Props (
PAFnec at at] PENS co FY
A A
2B 0
C
(ald (dio