Question

QUESTION4 Diagnostics Ltd is a key supplier of medical equipment to hospitals and other health facilities. Diagnostics was incorporated under the Cempanies Act of 2004 in 2012, and is a registered VAT vendor, Al its suppliers are also VAT vendors and VAT is calculated at a rate of 15%. The following infomation was extracted from the records of Dlagnostics Ltd for the reporting porlod ended 31 March 2016. (26 MARKS) Note Dr Cr 12 500 000 Sales Cost of sales Employee benefit expense Dividend income from subsidiary 5 850 000 1720 000 540 000 135 000 Interest income Finance costs Auditors remuneration Other expenses Property, plant and equipment Accumulated depreciation (01 April 2015) Investment in subsidiary Trade recelvables 2010 -278000 224 000 785 000 235 000 9 351 000 5 480 000 4 230 000 5 670 000 2 578 000 8 244 000 2一ㄧㄒㄧ- 3 Inventories Cash and cash equivalents Trade and other payables 2 535 000 Page 5 of7

Answer 1

Statement of Profit and Loss for the period ended 31st March, 2016

Particulars	Amount (N$)
Revenue from Operations (Sales)	12500000
Other Income	1057300
Total Income (A)	13557300
Less -
Cost of sales	5850000
Employee benefit expense	1720000
Finance cost	224000
Depreciation	1207000
Misc. Expense	2202510
Total Cost (B)	11203510
Profit before Tax (A-B)	2353790
Less - Tax	664557
Profit After Tax	1689233

Notes:

1. Calculation of other income

Other Income
Claim settlement on theft of vehicle	25600
Profit on sale of Vehicle	77500
Dividend Income	540000
Management fee from Subsidiary	135000
Interest income	278000
Interest income	1200
	1057300

2. Calculation of Misc Expense

Misc. Expense
Other expense	235000
Auditor remuneration	785000
Impairment loss of plant	758000
Provision for doubtful Debts	264800
Inventory reserve	75000
Inventory Written off for Missing inventory	83000
Bank charges	1710
	2202510