Accounting 9706 · AS & A Level · Preparation of financial statements
Preparation of financial statements — practice question
Alpha Limited is a manufacturing business that produces just one product. Each year, it manufactures and sells 1000 units, and the only stock held is raw materials. Financial information for the year ended 30 April 2016 is given.
(a(i))[8]
Prepare the manufacturing account covering the year ended 30 April 2016.
(a(ii))[7]
Prepare the income statement covering the year ended 30 April 2016.
(b)[5]
Calculate the expected annual profit if option 1 is introduced. Use your answer from (a) as the starting point and make any necessary adjustments.
(c)[5]
Advise the management on which of the two options it should adopt. Justify your answer.
Worked solution & mark scheme
This 25-mark question has a full step-by-step worked solution and mark scheme.