Financial Statements prepared by a PLC

Question 1

What is the Manufacturing Account?

Answer 1

This financial statement is only produced by businesses that actually make a product. It calculates the following key pieces of information/figures:
- Cost of Raw Materials Consumed
- Direct Costs
- Prime Costs
- Indirect Costs
- Factory Cost of Production
- Profit on Manufacture

Question 2

What is the Income Statement up to Gross Profit?

Answer 2

This section of the full Income Statement calculates the profit of buying and selling the inventory. The key purpose of this section is to calculate the Gross Profit for the business.

Question 3

What is the Income Statement to Unappropriated Profit?

Answer 3

This section of the Income Statement will deal with the Expenses (running costs) to the business as well as any ‘Other Income’ items. This will result in a Profit for the Year before tax being established. Taw will the be deducted based on the figure which will leave a Profit for the Year after tax. From this amount ordinary and preference shares dividends will be deducted, as well as the writing off of goodwill or preliminary expenses.

Question 4

What is the Statement of Financial Position?

Answer 4

This statement deals with what the business owns (assets) and what the business owes (liabilities), it also highlights what the business is worth (top and bottom half totals). The equity structure of the business can also be seen on this financial statement.