Self-test
(Text book contains questions A9.1 to A9.13)
Financial Accounting
Month DVD players
purchased
Unit price
Financial Accounting
Description Purchase
cost
Selling price Distribution costs of
selling items of inventory
(stock)
Financial Accounting
Financial Accounting
Applications
(Text book contains questions B9.1 to B9.5)
Individual exercises
Date Number of units
purchased
Unit cost Number of units
sold
Financial Accounting
Group of items Cost Selling price Cost of selling
Financial Accounting
Group exercise
Problem solving and evaluation
(Text book contains questions C9.1 and C9.2)
Financial Accounting
Year Reported profit FIFO at
1 Jan
FIFO at
31 Dec
LIFO at
1 Jan
LIFO at
31 Jan
Year end Debtor balances Known bad debts
Financial Accounting
Company A
Company B
Company C
Craigielaw plc
Making use of the Report and Accounts of Craigielaw plc and the accounting information
regarding Safe and Sure plc in the text book, answer the following questions. (Page numbers
refer to the Report and Accounts of Craigielaw.) Worksheets are provided to help you collect
and analyse the data.
This exercise on Craigielaw covers current assets. The exercise in the tutorial for Chapter 10
covers current liabilities and brings together the working capital aspects of current assets and
current liabilities.
Craigielaw plc Safe and Sure plc
Year 7 Year 6 Year 7
£m % £m % £m %
Current assets
Raw materials and consumables
Work in progress
Finished goods and goods for resale
Trade receivables (debtors)
Other receivables (debtors)
Prepayments
Financial Accounting
Craigielaw plc Safe and Sure plc
Year 7 Year 6 Year 7
Increase + % increase+
Year 7 Year 6 Decrease % decrease
Year 7 Year 6 Over Year 6
Raw materials and consumables 107.2
Work in progress 29.0
Finished goods and goods for resale 151.5
Trade receivables (debtors) 356.1
Other receivables (debtors) 33.0
Prepayments 28.6
Self-test
Text books contains the solutions to questions A9.1 to A9.13
Financial Accounting
Financial Accounting
Financial Accounting
Financial Accounting
Financial Accounting
Financial Accounting
Financial Accounting
Financial Accounting
B9.5
B9.6
Financial Accounting
(b) (i) LIFO by date of sale
(b) (ii) LIFO (the following calculation assumes that the accounting exercise is carried out
at the end of the month):
Financial Accounting
(c) Average cost (the following calculation assumes that the accounting exercise is carried
out at the end of the month):
B9.7 Use the rule lower of cost and net realisable value and consider each group of items
separately.
Financial Accounting
Financial Accounting
Financial Accounting
B9.9
Financial Accounting
B9.10
Problem solving and evaluation
C9.1
Financial Accounting
C9.2
C9.3
C9.4 If there is an increase in inventory (stock) during the year, this will increase profit. If
Financial Accounting
Year Reported
profit based
on FIFO
FIFO
increase/
(decrease)
Profit
before
stock ad
j
.
LIFO
increase/
(decrease)
Profit
based on
LIFO
C9.5
Year
end
Debtor
balances
Known
bad debts
Remaining
receivables
(debtors)
Amount
of
provision
P and L
change
in
Total P
and L
(A + B)
C9.6
Financial Accounting
Real-world case
Self-test: Supplement
Financial Accounting
S9.2
Financial Accounting
L4 Profit and loss account
S9.3
L6 Expense of insurance
Financial Accounting
Craigielaw plc
D9.1 Items in bold are taken from the statement of financial position (balance sheet) on page
25. Items in italics are taken from notes 15 and 16 on page 32.
Financial Accounting
D9.2 The following table shows how a 10 per cent variation alters the reported profit before
tax.
Trade receivables (debtors)
Finished goods inventories (stocks)
Financial Accounting
D9.3 Trends in current assets:
Financial Accounting
D9.4 Note 1 to the income statement (profit and loss account) states: