Income Statement - Financial Position - Profit Before Tax - Inventories - Project Writing Assignment Help

Assignment Task:

Income Statement - Financial Position - Profit Before Tax - Inventories - Project Writing Assignment Help 

Year ending 31 December         2019 €’000
Revenue                         102,700
Cost of Sales                  (79,650)
Gross Profit                    23,050
Administration Expenses         (5,580)
Selling costs                   (4,950)
Finance Costs                   (2,500)
Profit before tax               10,020
Income tax                      (2,200)
Retained Earnings               7,820

Note 3 - Material
The material costs set out above relate to materials bought from a UK supplier. The cost of these materials was GBP£450,000. The exchange rate between GBP and the Euro at the date of purchase was €1 = GBP£0.88. The materials had not been paid for by 31 December 2019 and the relevant rate of exchange at that date was €1 = GBP£0.95

Note 4 – Direct Labour
The total estimated contract costs have included a figure for bonuses due to the workers on this contract but the labour costs to date do not include any amount by way of a bonus. A bonus of 4% of the direct labour costs is payable on 21 January 2020 if the directors estimate that greater than 10% of the contract is complete by 31 December 2019. It was estimated in the original costings that one supervisor would spend 80% of his time involved on this contract whilst another would spend 60% of his time on this contract. Because of initial difficulties encountered on site, however, both supervisors ended up spending 90% of their time on this contract from commencement of the contract up to 31 December 2019. No amounts are included in the direct labour costs to date of €510k in respect of the supervisors’ salary costs. The supervisors’ annual salary cost for the year to 31 December 2019 was €102,500. Both supervisors are paid the same. The extra supervisors’ cost referred to in Note 4 was the only expected extra total cost above he original budget. Due to this increased contract cost, the customer has approved a variation resulting in an increase in contract revenue at 31 December 2019 of €1,200,000. At 31 December 2019 Green DAC has billed the customer €2,500,000 and received 75% of this amount.

You are required to:
Re-draft the Income Statement and Statement of Financial Position of the company for the
current year incorporating the necessary adjustments referred to above.

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