Blog: FIN621 VU Assignment 1 Fall 2012 Solution

Solution which I uploaded is below, please change it before making and uploading otherwise I will get Zero for having copied from you. thanks.

AMBLER DIVERSIFICATION LIMITEDINCOME STATEMENT

Particulars	Note	Amount Rs.
Sales Less: Cost of Goods Sold		17,000,000 5,700,000
Gross Profit		11300000
Less: Administrative Expenses Less: Selling Expenses		2,600,000 4,000,000
Operating Profit		4,700,000
Other Expenses		Nil
Earning Before Interest and Tax (EBIT)		4,700,000
Income Tax (30%)		1,410,000
Profit After Tax		3,290,000

Please note that the one time occurance of an event and loss thereof cannot be shown on the income statement body as it has to show income and an accident which might have caused loss, is not part of the normal operation of the company that is why it will be separately shown (Fin621 Handout Page 38, special items). 

AMBLER DIVERSIFICATION LIMITEDSTATEMENT OF RETAINED EARNINGS

Particulars	Notes	Amount Rs.
Retained Earnings for the year 2010		11,000,000
Overstatement due to Error		745,000
Retained Earnings (correction of Error)		10255000
Difference due new inventory accounting method		(4,800,000)
Retained Earning at the start of 2011		5,455,000
Net Loss on Disposal of Assets		(300,000)
Expenses on Clean Up Process		(350,000)
Net Retained Earnings at the start of 2011		4,805,000
Income after Tax for 2011		3,290,000
Total Retained Earnings at the end of 2011 without payment of dividend		8,095,000

AMBLER DIVERSIFICATION LIMITEDINCOME STATEMENT

Particulars	Note	Amount Rs.
Sales Less: Cost of Goods Sold		17,000,000 5,700,000
Gross Profit		11300000
Less: Administrative Expenses Less: Selling Expenses		2,600,000 4,000,000
Operating Profit		4,700,000
Other Expenses

loss on sale of asset 1,700,000 
profit before tax (EBT) 3,000,000 
pretax gains(gain on asset sale) 14,00,000
4,400,000
income tax(30%) 1,3,20,000
profit after tax 3,080,000