Problem
The following data are provided for a small manufacturing organization.
Liabilities TL 000s Assets TL000s
At cost depriciation
Share Capital 100 Fixed 140 40 100
Reserves 20
Debentures (10%) 40 Current Stock 35
Trade creditors 12 Debtors 26
Dividends payable 10 Cash 21
182 182
The following details relate to Manufacturing Organization during the year ended 30 September 2015.
A Sales totalled TL180,000 over the year of which two-third of the total were sold on credit and one-third cash
B Purchases of stocks were made on credit totalling TL80,000.
C Depreciation amounted to TL20,000.
D Operating expenses incurred for the year were TL25,000. TL22,000 was paid in cash with TL3,000 unpaid at 30th September 2015.
E The directors declared a final dividend for the year to 30 September 2015 of TL5,000. An interim dividend of TL4,000 had been declared during the year and paid. The previous year's dividend was also paid in full during the year.
F Debenture interest of TL4,000 was paid in cash.
G The closing stock was valued at TL15,000.
H Trade creditors were paid TL40,000.
I Debtors were paid TL110,000 in cash.
Using the information above, prepare the profit and loss account for the year ended 30 September 2015 together with a summarized balance sheet at that date.
Explain the logical bases of all the calculations you do clearly.