An unknown has given the answer of preparation of financial statement question.
Star Ltd
Statement of comprehensive income
For the year ended 30 June 2011 .
Revenue $ 3,461,000
Other income 43,800 (a)
Changes in inventories of finished goods and work in progress 6,200
Raw material and consumables used (2,166,200)
Employee benefits expense (25,000)
Depreciation and amortization expense (24,600)(b)
Other Expense (296,000) (c)
Finance costs (31,000)
Total Expenses (2,549,000)
Profit before tax $968,200
Income tax expense (400,000)
PROFIT FOR THE YEAR $568,200
Other comprehensive income
Gain arising during the year revaluation of land 177,000(d)
Gain arising during the year revaluation of building 210,000(d)
Gain on revaluation of available for sale financial assets 15,000
Income tax expense (120,600)(e)
Other comprehensive income for the year, net of tax $281,400
TOTAL COMPREHENSIVE INCOME FOR THE YEAR $849,600
Expaintion and working out.
(a)other income comprise of proceeds from sale of plant available –for-sale financial assets less
Carring amount of available- for- sale financial assets sold:
= $93,800 – $50,000
= $43,800
(b) Depreciation expense :
Plant $ 18,000
Office equipment 1,600
Building 5000
Total depreciation expense $24,600
(c ) Other expenses less interest expense on bank loan and mortgage
$ 327,000 - $31,000 = $296,000
(d)Gain arising during the year revaluation of:
Land = Fair value of land less Land at cost
= $600,000 – $423,000
= $177,000
Building = Fair value of Building less (Buliding at cost less Acu
=700,000 – (500,000 – (5,000 +5,000))
= $210,000
(e)Income tax expense 30% of other comprehensive income for the year.
=30% x (177,000 +210,000 +15,000)
= $120,600
Star Ltd
Statement of Financial Statement
As at 30th June 2011 .
Assets
Current Assets.
Cash and cash equivalents $300,000
Trade receivable 1,010,900(a)
Other financial assets 316,400(b)
Inventory 1,302,200
Total current Assets $2,929,500
Non-Current Assets.
Property , Plant, & equipment 1,451,700(c)
Good will 400,000
Total non current assets $1,851,700
Total assets $4,781,200
Equity & Liabilities
Liabilities
Current liabilities
Trade payable 264,000
Mortgage 100,000
Dividend payable 60,000(d)
Bank loan 87,000
Current tax Payable 300,000
Total current liabilities $811,000
Non Current liabilities
Deferred tax liability 226,600(e)
Long-Term provision 150,000
Total non-current liabilities $376,600
Total liabilities $1,187,600
Net Assets $3,593,600
Shareholders’ equity
Share capital 2,125,000
General Reserve 370,000 (f)
Revaluation reserve 120,000
Retain earnings (209,000-20,000-60,000+849,600) 978,600(g)
Total shareholders’ equity $3,593,600
Explaination and calculation
(a)Accounts receivable comprise of accounts recevable less allowence for doubtful debts
=$1,085,900- $75,000
= 1,010,900
(b) Other financial assets cpmprise of Available for sale financial assets add increase in fair value of available for sale financial assets
= $301,400 +$15,000
=$316,400
(c ) Property , Plant & equipment
Office furniture $12,000 - ($1,700+1600) = $8,700
Plant $180,000 – ($19,000+18000) =$143,000
Buildings =700,000
Land =$600,000
Total Property,Plant & Equipment $1,451,700
(d) Dividend payable is calculated from $0.04 per shares of 1,500,000 shares
= $0.04 x 1,500,000
=$ 60,000
(e)Deferred tax liability comprise of beginning balance of deferred tax liability add deferred tax liability on income tax expense:
= $6,000 + $100,000 + $120,600
=$226,600
(f)General reserve comprise of beginning balance add transfer of retain earnings to general reserve
=$350,000 + $20,000
= $370,000
(g)Retained earnings comprise of retain earnings for the year less transfer of retain earning less divident declared and add total comprehensive inome for the year.
= $209,000 - $20,000 - $60,000 + $849,600
= $978,600
Star Ltd
Statement of Changes in equity
For the year ended 30 June 2011
Share
Capital
($) Retain
earnings($) General
Reserve($) Dividents declared Revaluation reserve($) Total($)
Balance at 1 July 2010 209,000 350,000 120,000 679,000
Changes in equity
for 2011 2,125,000 (20,000) 20,000 60,000 2,065,000
2,744,000
Total
comprehensive
for the year Income 849,600
2,125,000 189,000 370,000 60,000 120,000 $3,593,600
Star Ltd
Statement of comprehensive income
For the year ended 30 June 2011 .
Revenue $ 3,461,000
Other income 43,800 (a)
Changes in inventories of finished goods and work in progress 6,200
Raw material and consumables used (2,166,200)
Employee benefits expense (25,000)
Depreciation and amortization expense (24,600)(b)
Other Expense (296,000) (c)
Finance costs (31,000)
Total Expenses (2,549,000)
Profit before tax $968,200
Income tax expense (400,000)
PROFIT FOR THE YEAR $568,200
Other comprehensive income
Gain arising during the year revaluation of land 177,000(d)
Gain arising during the year revaluation of building 210,000(d)
Gain on revaluation of available for sale financial assets 15,000
Income tax expense (120,600)(e)
Other comprehensive income for the year, net of tax $281,400
TOTAL COMPREHENSIVE INCOME FOR THE YEAR $849,600
Expaintion and working out.
(a)other income comprise of proceeds from sale of plant available –for-sale financial assets less
Carring amount of available- for- sale financial assets sold:
= $93,800 – $50,000
= $43,800
(b) Depreciation expense :
Plant $ 18,000
Office equipment 1,600
Building 5000
Total depreciation expense $24,600
(c ) Other expenses less interest expense on bank loan and mortgage
$ 327,000 - $31,000 = $296,000
(d)Gain arising during the year revaluation of:
Land = Fair value of land less Land at cost
= $600,000 – $423,000
= $177,000
Building = Fair value of Building less (Buliding at cost less Acu
=700,000 – (500,000 – (5,000 +5,000))
= $210,000
(e)Income tax expense 30% of other comprehensive income for the year.
=30% x (177,000 +210,000 +15,000)
= $120,600
Star Ltd
Statement of Financial Statement
As at 30th June 2011 .
Assets
Current Assets.
Cash and cash equivalents $300,000
Trade receivable 1,010,900(a)
Other financial assets 316,400(b)
Inventory 1,302,200
Total current Assets $2,929,500
Non-Current Assets.
Property , Plant, & equipment 1,451,700(c)
Good will 400,000
Total non current assets $1,851,700
Total assets $4,781,200
Equity & Liabilities
Liabilities
Current liabilities
Trade payable 264,000
Mortgage 100,000
Dividend payable 60,000(d)
Bank loan 87,000
Current tax Payable 300,000
Total current liabilities $811,000
Non Current liabilities
Deferred tax liability 226,600(e)
Long-Term provision 150,000
Total non-current liabilities $376,600
Total liabilities $1,187,600
Net Assets $3,593,600
Shareholders’ equity
Share capital 2,125,000
General Reserve 370,000 (f)
Revaluation reserve 120,000
Retain earnings (209,000-20,000-60,000+849,600) 978,600(g)
Total shareholders’ equity $3,593,600
Explaination and calculation
(a)Accounts receivable comprise of accounts recevable less allowence for doubtful debts
=$1,085,900- $75,000
= 1,010,900
(b) Other financial assets cpmprise of Available for sale financial assets add increase in fair value of available for sale financial assets
= $301,400 +$15,000
=$316,400
(c ) Property , Plant & equipment
Office furniture $12,000 - ($1,700+1600) = $8,700
Plant $180,000 – ($19,000+18000) =$143,000
Buildings =700,000
Land =$600,000
Total Property,Plant & Equipment $1,451,700
(d) Dividend payable is calculated from $0.04 per shares of 1,500,000 shares
= $0.04 x 1,500,000
=$ 60,000
(e)Deferred tax liability comprise of beginning balance of deferred tax liability add deferred tax liability on income tax expense:
= $6,000 + $100,000 + $120,600
=$226,600
(f)General reserve comprise of beginning balance add transfer of retain earnings to general reserve
=$350,000 + $20,000
= $370,000
(g)Retained earnings comprise of retain earnings for the year less transfer of retain earning less divident declared and add total comprehensive inome for the year.
= $209,000 - $20,000 - $60,000 + $849,600
= $978,600
Star Ltd
Statement of Changes in equity
For the year ended 30 June 2011
Share
Capital
($) Retain
earnings($) General
Reserve($) Dividents declared Revaluation reserve($) Total($)
Balance at 1 July 2010 209,000 350,000 120,000 679,000
Changes in equity
for 2011 2,125,000 (20,000) 20,000 60,000 2,065,000
2,744,000
Total
comprehensive
for the year Income 849,600
2,125,000 189,000 370,000 60,000 120,000 $3,593,600
