Preparation of Financial Statement

The summarized trial balance of Star Ltd as at 30 June 2011 is shown below.
Debit Credit
Ordinary share capital (1500000 shares) $2125000
General reserve (1/7/10) 350000
Revaluation reserve (1/7/10) 120000
Retained earnings (1/7/1 0) 209000
Bank loan 87000
Deferred tax liability 6000
Mortgage 100000
Accounts payable 264000
Provision for employee benefits (long-term) 150000
Allowance for doubtful debts 75000
Accumulated depreciation:
Plant 19000
Office furniture 1 700
Buildings 5000
Land (at cost) $ 423 000
Factory buildings (at cost) 500000
Available-for-sale financial assets 301 400
Accounts receivable 1 085900
Plant (at cost) 180000
Inventory 1 302200
Office furniture (at cost) 12000
Goodwill 400000
Cash at bank 300000
Employee benefits expense 25000
Sales 3461 000
Proceeds from sale of plant available-for-sale financial assets 93800
Carrying amount of available-for-sale financial assets sold 50000
Raw materials and consumables used 2166200
Changes in inventories of finished goods and work in progress 6200
Other expenses (excluding depreciation but including interest expense
$31 000 on bank loan and mortgage) 327000
$7072700 $7072700

Additional information
(a) Depreciation is to be provided for:
Plant $18000
Office furniture 1 600
Buildings 5000
(b) The estimated total income tax expense relating to profit or loss items only for 2011
$400 000, consisting of $300 000 for the current liability and $100000 as a deferred tax liability.
(c) Final dividends of 4c per share were declared by directors.
(d) Directors decided to transfer $20 000 from retained earnings to general reserve.
(e) Following expert advice, the directors decided on 30 June 2011 to revalue the land and factory buildings to reflect current fair values. Consequently, directors placed a value of $600000 land and $700000 on the buildings.
(f) An increase in fair value of $15 000 for available-for-sale financial assets on hand 30 June 2011 is yet to be recognized.
(g) The revaluation reserve balance at 1 July 2010 includes $14 000 (net of deferred tax) resulting from an increase in the fair value of available-for-sale financial assets. Of this amount $3 500 relates to the available-for-sale financial assets sold during the year.
(h) Company tax rate is 30%.


Based on the ledger balances and additional information provided, prepare a statement of comprehensive income (classified by nature), a statement of financial position and a statement of changes in equity for Star Ltd for the year ended 30 June 2011, to comply with IAS 1.



"accounting software" "cost accountant" "financial management" account accountant accounting accounting education accounting format accounting glossary accounting questions accounting software accounting Term ad advertising american express answer auditing balance sheet bank bba BCA bonus business Business Dictionary CA CA- IPCC CA-CPT CA-Final capital career Category cfa children coaching company conferences Consignment Accounting contact corporate accounting Correction of Spelling and Grammar Mistakes cost cost accounting CPT credit card debit card debt degree depreciation dictionaries donation earning ecommerce economics education Events finance Finance Dictionary financial financial accounting financial mathematics Financial Ratios forex management free funds google google apps google talk guest writer Help Center ICWAI IFRS inspiration insurance terms interest journal entries lectures List management accounting mathematics MBA MCA media mutual funds ngo notes overhead pdf pnb presentation Prof. Vinod profiles quickbooks quiz ratio rbi reporting Service Tax shares solution students tally tax teacher teaching Test Testimonials tips treasury management tutorial UGC NET Commerce video webinars Wikipedia working capital
Education : Preparation of Financial Statement
Preparation of Financial Statement
Not found any lecture VIEW ALL Readmore Reply Cancel reply Delete By Home PAGES Lectures View All RECOMMENDED FOR YOU Category ARCHIVE SEARCH ALL Lectures Not found any lecture match with your request, please help to write it and send it to our email at for making this website free accounting and finance encyclopedia. Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS CONTENT IS PREMIUM Please share to unlock