Sction 1 – Presentation of financial statements (10 MARKS) The adjusted trial ba
ID: 2533911 • Letter: S
Question
Sction 1 – Presentation of financial statements (10 MARKS)
The adjusted trial balance of Timber Ltd as at 30 June 2017 is as follows:
Timber Ltd
Debit
Credit
$
$
Account names
5% debentures – due 30/11/2017(secured over inventories)
60,000
Accounts payable
447,000
Accounts receivable
850,000
Accumulated amortisation – patents & trademarks
45,000
Accumulated depreciation -
Accumulated impairment loss – goodwill
210,000
Administrative staff salaries expense
590,000
Advertising expense
70,000
Allowance for doubtful debts
71,500
Asset Revaluation Reserve - Held to maturity investment (revaluation increment on 30/06/2017 after tax deduction)
21,000
Asset Revaluation Reserve - Land (revaluation increment on 30 June 2017 - after tax deduction)
168,000
Bank loan (unsecured –long-term repayable amount)
210,000
Bank loan (unsecured –short-term repayable due)
90,000
Buildings
90,000
Buildings
1,100,000
Carrying amount of plant and machinery sold
24,000
Cash at bank
800,000
Cost of sales
2,924,000
Current tax liabilities
141,000
Debentures held in Rome Ltd (mature on 30/4/2018)
714,000
Deferred tax asset
190,000
Deferred tax liability
103,000
Deposits at call
100,000
Dividends receivable
8,000
Dividends revenue
68,000
Final dividend declared – ord
145,360
Final dividend declared - pref
45,300
Final dividend payable
190,660
Fixtures & fittings
97,000
Fixtures & fittings - at cost
243,520
Freight inwards
90,000
Freight outwards
115,000
General reserve
780,000
Goodwill
832,000
Held to maturity investment (at fair value)
145,000
Income tax expense
401,000
Interest expense
74,000
Interest payable
19,000
Interest revenue
30,000
Interim dividend paid - ord
109,020
Inventories
1,850,000
Land (at fair value)
1,476,000
Loan to Jets Ltd (due on 30/6/2025)
420,000
Mortgage loan (secured over land and buildings – due 30/9/2022)
504,000
Ordinary shares, fully paid
3,634,000
Other administrative expense
360,000
Other expenses
137,000
Other selling expense
220,000
Patents and trademarks
145,000
Plant & machinery
226,000
Plant & machinery - at cost
884,000
Preference shares, fully paid
226,500
Prepayments
50,000
Proceeds on sale of plant and machinery
50,000
Provision for annual leave
62,000
Provision for long service leave - long term liable
134,000
Provision for long service leave -short term liable
85,000
Retained earnings as at 1/7/2016
850,000
Sales returns
32,000
Sales revenue
6,968,340
Sales staff salaries and commission expense
750,000
Sundry revenue
46,200
Total Asset revaluation reserve as at 1/7/2016
364,000
Transfer to general reserve
60,000
Underwriting commission and other share issue costs
37,000
Total
15,991,200
15,991,200
Prepare a statement of profit or loss and other comprehensive income for Timber Ltd for the year ended 30 June 2017 (classify expenses by functions). Cross reference all workings
The adjusted trial balance of Timber Ltd as at 30 June 2017 is as follows:
Timber Ltd
Debit
Credit
$
$
Account names
5% debentures – due 30/11/2017(secured over inventories)
60,000
Accounts payable
447,000
Accounts receivable
850,000
Accumulated amortisation – patents & trademarks
45,000
Accumulated depreciation -
Accumulated impairment loss – goodwill
210,000
Administrative staff salaries expense
590,000
Advertising expense
70,000
Allowance for doubtful debts
71,500
Asset Revaluation Reserve - Held to maturity investment (revaluation increment on 30/06/2017 after tax deduction)
21,000
Asset Revaluation Reserve - Land (revaluation increment on 30 June 2017 - after tax deduction)
168,000
Bank loan (unsecured –long-term repayable amount)
210,000
Bank loan (unsecured –short-term repayable due)
90,000
Buildings
90,000
Buildings
1,100,000
Carrying amount of plant and machinery sold
24,000
Cash at bank
800,000
Cost of sales
2,924,000
Current tax liabilities
141,000
Debentures held in Rome Ltd (mature on 30/4/2018)
714,000
Deferred tax asset
190,000
Deferred tax liability
103,000
Deposits at call
100,000
Dividends receivable
8,000
Dividends revenue
68,000
Final dividend declared – ord
145,360
Final dividend declared - pref
45,300
Final dividend payable
190,660
Fixtures & fittings
97,000
Fixtures & fittings - at cost
243,520
Freight inwards
90,000
Freight outwards
115,000
General reserve
780,000
Goodwill
832,000
Held to maturity investment (at fair value)
145,000
Income tax expense
401,000
Interest expense
74,000
Interest payable
19,000
Interest revenue
30,000
Interim dividend paid - ord
109,020
Inventories
1,850,000
Land (at fair value)
1,476,000
Loan to Jets Ltd (due on 30/6/2025)
420,000
Mortgage loan (secured over land and buildings – due 30/9/2022)
504,000
Ordinary shares, fully paid
3,634,000
Other administrative expense
360,000
Other expenses
137,000
Other selling expense
220,000
Patents and trademarks
145,000
Plant & machinery
226,000
Plant & machinery - at cost
884,000
Preference shares, fully paid
226,500
Prepayments
50,000
Proceeds on sale of plant and machinery
50,000
Provision for annual leave
62,000
Provision for long service leave - long term liable
134,000
Provision for long service leave -short term liable
85,000
Retained earnings as at 1/7/2016
850,000
Sales returns
32,000
Sales revenue
6,968,340
Sales staff salaries and commission expense
750,000
Sundry revenue
46,200
Total Asset revaluation reserve as at 1/7/2016
364,000
Transfer to general reserve
60,000
Underwriting commission and other share issue costs
37,000
Total
15,991,200
15,991,200
Explanation / Answer
Revenue 69,36,340 Cost of sales 29,24,000 Gross profit 40,12,340 Other revenue 76,200 Other income (loss) - Selling expenses 10,40,000 Administrative expenses 9,50,000 Other expenses 3,42,000 Finance costs 1,11,000 Profit before income tax 16,45,540 Income tax expense 4,01,000 Profit for the period 12,44,540 Other comprehensive income: - Items that will not be reclassified to profit or loss Gain arising during the year on revaluation of land 1,68,000 Gain arising during the year on investments in equity instruments 21,000 Income tax relating to items not reclassified 39,690 Other comprehensive income during the year, net of tax - Total comprehensive income for the year 1,49,310
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.