Accounting 9706 · AS & A Level · Preparation of financial statements

Preparation of financial statements — practice question

Look at Source A1 in the insert.

(a(i))[4]

Calculate the accurate value of inventory at 30 June 2020.

(a(ii))[2]

Calculate the cost of sales for the year ended 30 June 2020.

(b)[15]

Prepare a corrected income statement for the year ended 30 June 2020.

(c)[4]

Explain how your treatment of item 8 would change if there was a $25\%$ possibility of the company losing the case.

Worked solution & mark scheme

This 25-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Draft inventory recorded as $78 000$” …