Prepare the income statement, statement of changes in equity and statement of financial position of a company from the given data.

How to lay out the answer. Follow the frame, then write it in your own words.

1 · Income statement. Revenue to gross profit; add other income; deduct distribution, administrative and finance costs.
2 · Tax. Profit before tax − income tax expense = profit for the year.
3 · Dividends. Preference = rate × capital; ordinary = shares × rate per share; leave out dividends declared after the year end.
4 · Statement of changes in equity. Columns for stated capital and retained earnings: opening, profit, dividends, closing.
5 · Statement of financial position.
- Non-current and current assets.
- Equity: stated capital and retained earnings.
- Debentures as non-current liabilities; tax payable and accruals as current.
6 · Check and note. Totals agree; disclose the final dividend in a note.

Scoring tip: Present the statement of changes in equity as a grid; it shows the examiner every movement at once.