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

Preparation of financial statements — practice question

Look at Source A in the insert.
(a)[3]

Calculate the values, at cost, of the following: inventory of finished goods at 1 July 2022 cost of production inventory of finished goods at 30 June 2023.

(b)[13]

Prepare a revised statement of profit or loss for the year ended 30 June 2023.

(c)[1]

State which accounting concept is being applied to the treatment of the goods sent on a sale or return basis in item 2.

(d)[3]

Explain how you would treat the legal proceedings in item 4.

(e)[5]

Advise the directors whether or not to stop applying factory profit. Justify your answer.

Worked solution & mark scheme

This 25-mark question has a full step-by-step worked solution and mark scheme. One marking point: Finished-goods inventory at 1 July 2022 = 20 000

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