10 inventive controls ltd was incorporated and started business early in january 201 4306290

10 inventive controls ltd was incorporated and started business early in january 201 4306290

10) Inventive Controls Ltd. was incorporated and started business early in January 2012 to manufacture electronic control devices to monitor traffic. Inventive purchased a small manufacturing plant and office building in a new industrial park and was in operation immediately. General ledger account balances at December 31, 2012 are as follows:

Sales commission

62,000

Supervisory salaries, production manager

66,000

Executive salaries

120,000

Raw material purchases

136,500

Miscellaneous plant supplies

13,700

Depreciation, office building

7,900

Depreciation, plant equipment

9,900

Property tax (80% for office building; 20% for plant building)

4,400

Sales

850,000

Direct labour

64,000

Raw material inventory, Dec 31, 2012

13,600

Utilities expense (60% related to office)

19,000

General administrative expense

42,300

At December 31, 2012, there was no work-in-process, but 30% of the units manufactured remained in ending finished goods inventory. Inventive uses the straight-line method to calculate depreciation.

Requirement:

a. Calculate the value of cost of goods sold and ending finished goods inventory under IFRS.

b. Prepare an income statement for Inventive for the year ended December 31, 2012.

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