Page 340 - F3 -FA Integrated Workbook STUDENT 2018-19
P. 340
Chapter 22
Example 1
Statement of profit or loss
The statements of profit or loss for Hide and Seek for the year ended
31 December 20X5 are presented below
Hide Seek
$ $
Revenue 400,000 275,000
Cost of sales 230,000 165,000
——— ———
Gross profit 170,000 110,000
Distribution costs 44,000 28,000
Administrative expenses 36,000 24,000
——— ———
Operating profit 90,000 58,000
Interest payable 10,000 6,000
——— ———
Profit before tax 80,000 52,000
Income tax expense 20,000 12,000
——— ———
Profit after tax for the year 60,000 40,000
——— ———
The following information is also relevant:
(i) Hide acquired 80% of the ordinary shares of Seek on 1 January 20X1.
(ii) During the year ended 31 December 20X5, Hide sold goods to Seek for
$25,000 making a gross profit margin on the sale of 30%. At the
reporting date, one third of these goods remained unsold in the
inventories of Seek.
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