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On investigation of the records, it was found that inventory for the year ending
31 Dec. 2022 overstated by TZS 40,000.
st
Required: Prepare the correct statement of profit or loss for the ending on 31 Dec.
st
2022 and 31 Dec. 2023.
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Solution 2.8
FOR ONLINE READING ONLY
Corrected statement of profit or loss

Details 31 Dec. 2022 31 Dec. 2023
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LANGUAGE EDITING
TZS TZS TZS TZS
Sales 800,000 1,200,000
LANGUAGE EDITING
Cost of goods sold:
Opening inventory 100,000 160,000
Add: Purchases 720,000 980,000
Cost of goods available for sale 820,000 1,140,000
Less: Closing inventory 160,000 660,000 180,000 960,000
(200,000-40,000)
Goss profit 140,000 240,000

Less: Operating expenses 80,000 140,000
Operating profit 60,000 100,000

Example 2.9
Use the information provided in example 2.7, to prepare the correct statement of
profit or loss for the year ending 31 December 2022 and 31 December 2023. Assuming
st
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opening and closing inventories for 2022 were understated by TZS 40,000.

Student’s Book Form Five
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