Financial statements cbt

michaelar25

Panic!!!!!

Im finding this really hard!

How do you get the Dist cost & Admin cost on task 1.1 iv been trying for ages and just cant seem to get it!

Paisley

Hi michaelar25

Not sure which bit you're stuck on, so hope this helps.

Land and buildings at cost are £81,778
Land of £41,778 is not depreciated, that leaves buildings of £40,000
£40,000 x 5% straight line = £2,000 depreciation charge

Plant and equipment at cost are £24,000
£24,000 - £8,000 accumulated depreciation = £16,000
£16,000 x 25% reducing balance = £4,000 depreciation charge

That gives us a total depreciation charge for the year of £6,000.

£6,000 is then apportioned to:

Cost of sales 60% = £3,600
Distribution costs 30% = £1,800
Admin expenses 10% = £600

Distribution costs:
£ 9,977 from TB
£ 1,800 depreciation
£ 160 accrual
£11,937 TOTAL

Admin expenses:
£6,755 from TB
£ 600 depreciation
£ 24 bad debt written off
£7,379 TOTAL

Hope that makes sense.

michaelar25

thank you, that all makes sense now! I think when you look at something for so long you just end up getting lost

Paisley

No problem and glad it made sense!