Assignment
The Sydney Company Limited provided the following Trial Balance in regard to its operation for the year ended 30 June 2016
|
|
2015
|
2016
|
|
|
Debit
|
Credit
|
Debit
|
Credit
|
|
|
$
|
$
|
$
|
$
|
|
Cash at bank
|
64,308
|
|
197,332
|
|
|
Call on deposit
|
60,000
|
|
60,000
|
|
|
Petty cash
|
5,000
|
|
5,000
|
|
|
Advertising prepaid
|
1,960
|
|
2,130
|
|
|
Account receivable
|
69,835
|
|
61,303
|
|
|
Inventory
|
41,907
|
|
52,867
|
|
|
Land and building
|
190,000
|
|
190,000
|
|
|
Motor Vehicle
|
61,000
|
|
86,000
|
|
|
Accumulated depreciation- Building
|
|
8,500
|
|
15,700
|
|
Accumulated depreciation
|
|
12,400
|
|
25,900
|
|
Goodwill on acquisition
|
80,000
|
|
80,000
|
|
|
Accumulated impairment loss- Goodwill
|
|
-
|
|
8,000
|
|
Account payable
|
|
47,879
|
|
45,361
|
|
Provision long service leave
|
|
18,000
|
|
23,000
|
|
Taxation payable
|
|
27,080
|
|
61,416
|
|
Wages accrued
|
|
1,036
|
|
1,248
|
|
Rental income in Advance
|
|
600
|
|
800
|
|
Dividend payable
|
|
15,000
|
|
12,000
|
|
Mortgage
|
|
30,000
|
|
20,000
|
|
Share capital
|
|
350,000
|
|
360,000
|
|
|
|
|
|
|
|
Retained earnings
|
|
26,168
|
|
36,515
|
|
Sales
|
|
750,000
|
|
847,124
|
|
Cost of goods sold
|
475,000
|
|
477,502
|
|
|
Rental income received
|
|
12,000
|
|
17,000
|
|
Wages
|
125,000
|
|
127,308
|
|
|
Superannuation
|
4,753
|
|
5,092
|
|
|
Long service leave
|
4,000
|
|
5,000
|
|
|
Advertising
|
8,500
|
|
9,600
|
|
|
General expenses
|
24,000
|
|
22,305
|
|
|
Impairment of Goodwill
|
8,000
|
|
8,000
|
|
|
Depreciation- Building
|
6,200
|
|
7,200
|
|
|
Depreciation- Motor Vehicle
|
12,500
|
|
13,500
|
|
|
Interest expenses
|
1,500
|
|
1,700
|
|
|
Bad debt
|
200
|
|
809
|
|
|
Income tax
|
55,000
|
|
61,416
|
|
|
Total
|
1,298,663
|
1,298,663
|
1,474,064
|
1,474,064
|
Additional information for the June end 2016.
1. All sales and purchase are in credit.
2. All the expenses except depreciation, impairment and bad debts is cash expenses.
3. Company is maintaining tax as per tax payable method.
4. Dividend payable of 2015 is paid.
5. Company paid interim dividend $15,000.
6. The company has book value of land and building $190,000 and revaluation was done by company where valuator revalue same assets worth $185,000.
7. 10% of retained earning transferred to General Reserve.
8. Company issued share capital $10,000 at June end 2016.
9. Company transferred its assets revaluation loss to retained earnings.
Requirement
a. Comprehensive Income Statement
b. Statement of Change in Equity
c. Statement of Financial Position
d. Cash Flow Statement
|
The Sydney Company Limited
Comprehensive Income Statement
For the year ended 30 June 2016
|
|
Particulars
|
Note
|
$
|
|
Sales Revenue
|
|
847,124
|
|
Cost of Sales
|
|
(477,502)
|
|
Gross Profit
|
|
369,662
|
|
Other Income
|
1
|
17,000
|
|
Employees benefit
|
2
|
(137,400)
|
|
Administrative expenses
|
3
|
(32,714)
|
|
Depreciation
|
4
|
(20,700)
|
|
Impairment of goodwill
|
|
(8000)
|
|
Finance cost
|
5
|
(1,700)
|
|
Profit before income tax
|
|
186,108
|
|
Income tax expenses
|
|
(61,416)
|
|
Operating profit after tax
|
|
124,692
|
|
Gain/(losses) recognized
|
|
(5,000)
|
|
Total change in equity during the period
|
6
|
119,692
|
Note 1: Rental
Note 2: Consist of Wages, Superannuation and Long Service Leave $127,308, $5,092 and $5,000 respectively.
Note 3: Consist of Advertising, general expenses and bad debts $9,600, $22,305 and $809 respectively.
Note 4: Building and Motor vehicle $7,200 and $13,500 respectively.
Note 5: Interest expenses
Note 6: Revaluation of building decreased.
|
The Sydney Company Limited
Statement of Change in Equity
For the year 30 June 2016
|
|
|
Retaining Earnings
|
Capital
|
Assets Revaluation Reserve
|
General Reserve
|
Total
|
|
Opening Balance
|
63,515
|
350,000
|
0
|
0
|
413,515
|
|
Add: Profit for the period
|
124,692
|
|
|
|
124,692
|
|
Gain/(Loss0 recognized directly in equity(a)
|
|
|
(5000)
|
|
(5,000)
|
|
Dividend Paid/Declared
|
(27,000)
|
|
|
|
(27,000)
|
|
Transferred to General Reserve
|
(1,247)
|
|
|
1,247
|
-
|
|
Issue of Share capital (b)
|
|
10,000
|
|
|
10,000
|
|
ARR transferred to R/E
|
(5,000)
|
|
5,000
|
|
-
|
|
Closing Balance
|
154,960
|
360,000
|
-
|
1,247
|
516,207
|
(a) You have to adjust the value of revaluation of Land and Building in your final Statement of Financial Position. At this time, the value is $190,000 but when you prepare the final balance sheet, then you have to decreased this value to $185,000. But before to adjust, you have to also check the opening and closing value of Land and Building. Sometime, your accountant can give you the adjusted Land and Building value where opening and closing value may not be same.
(b) Additional share issue also has same impact. You have to increase the share capital by $10,000 in your final statement of financial position. For this you have to also check the opening and closing balance. If the closing value is more than opening value by $10,000 then you don't need to adjust.
|
The Sydney Company Limited
Statement of Financial Position
As of 30 June 2016
|
|
|
Note
|
2016
|
|
Assets
|
|
|
|
Current Assets
|
|
|
|
Cash and Cash Equivalent
|
1
|
262,332
|
|
Trade and Other Receivable
|
|
61,303
|
|
Inventories
|
|
52,867
|
|
Other Current Assets
|
2
|
2,130
|
|
Total Current Assets
|
|
378,632
|
|
Non-current Assets
|
|
|
|
Land and Building
|
3
|
185,000
|
|
Less: Accumulated Depreciation
|
|
(15,700)
|
|
Motor Vehicle
|
|
86,000
|
|
Less: Accumulated Depreciation
|
|
(25,900)
|
|
Goodwill
|
|
80,000
|
|
Less: Accumulated impairment
|
|
(8,000)
|
|
Total Non-current Assets
|
|
301,400
|
|
Total Assets
|
|
680,032
|
|
Liabilities
|
|
|
|
Current Liabilities
|
|
|
|
Trade Payable
|
|
45,361
|
|
Other Payable
|
4
|
25,048
|
|
Taxation payable
|
|
61,416
|
|
Dividend payable
|
|
12,000
|
|
Total Current Liabilities
|
|
143,825
|
|
Non-Current Liabilities
|
|
|
|
Mortgage
|
|
20,000
|
|
Total Non-Current Liabilities
|
|
20,000
|
|
Total Liabilities
|
|
163,825
|
|
Net Assets
|
|
516,207
|
|
Equity
|
5
|
|
|
Share Capital
|
|
360,000
|
|
Retained Earnings
|
|
154,960
|
|
General Reserve
|
|
1,247
|
|
Total Equity
|
|
516,207
|
Note 1: Cash, call deposit and petty cash are included.
Note 2: All prepaid expenses are included.
Note 3. The revaluation value is reported.
Note 4: Provision for long service leave, wages accrued and rental income in advance are included.
Note 5: From Statement of changes in equity
|
The Sydney Company Limited
Cash Flow Statement
For the year ended 30 June 2016
|
|
|
$
|
$
|
|
Cash flow from operating activities
|
|
|
|
Cash receipt from customer
|
854,847
|
|
|
Rental income
|
17,200
|
|
|
Cash paid to creditors
|
(490,980)
|
|
|
Wages
|
(127,096)
|
|
|
Superannuation
|
(5,092)
|
|
|
General expenses
|
(22,305)
|
|
|
Advertising
|
(9,770)
|
|
|
Tax expenses
|
(27,080)
|
|
|
Interest expenses
|
(1,700)
|
|
|
Net cash from Operating Activities
|
|
188,024
|
|
Purchase of Motor Vehicle
|
(25,000)
|
|
|
Net cash used in Investment Activities
|
|
(25,000)
|
|
Cash flow from Financing Activities
|
|
|
|
Proceed from Issue of Share Capital
|
10,000
|
|
|
Payment of Mortgage
|
(10,000)
|
|
|
Dividend payment
|
(30,000)
|
|
|
Net cash used in Financing Activities
|
|
(30,000)
|
|
Net increase/(decrease) in cash and cash equivalents
|
|
133,024
|
|
Cash and cash equivalents at beginning of period
|
|
64,308
|
|
Cash and cash equivalents at end of period
|
|
197,332
|
Cash and cash equivalents at end of period should be equal with the balance of statement of financial position. You can check with your question.