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

Preparation of financial statements — practice question

Consult Source A in the insert.
(a(i))[6]

Prepare the manufacturing account for year ended 30 September 2024.

(a(ii))[9]

Prepare the statement of profit or loss for the year ended 30 September 2024.

(b)[2]

Explain why the depreciation properly charged on factory machinery is only $23600$ when depreciation is worked out at $10\%$ per annum on cost.

(c)[3]

Calculate, to two decimal places, the rate of factory profit that the company will use in the year ending 30 September 2025.

(d)[5]

Advise the directors on whether depreciation of premises ought to be included when factory profit is being calculated. Support your answer.

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