Question 2-

Preparation of a statement of financial position

The summarised trial balance of Smithy's Ltd, a snack food manufacturing company, includes the following accounts at 30 June 2015:

DR ($) CR ($)

Cash on hand 5,000

Cash at bank 172,000

Trade debtors 744,000

Allowance for doubtful debts 18,000

Rent receivable 28,000

Prepaid insurance 114,000

Raw materials inventory 490,000

Work in progress inventory 151,000

Finished goods inventory 180,000

Investment in listed companies (available for sale) 252,000

Land, at valuation 1,250,000

Buildings, at cost 4,030,000

Accumulated depreciation - buildings 483,000

Plant and equipment, at cost 3,275,000

Accumulated depreciation - plant and equipment 726,000

Leased assets, at cost 775,000

Accumulated depreciation - leased assets 310,000

Goodwill 1,200,000

Accumulated impairment - goodwill 170,000

Trademarks 310,000

Deferred tax asset 18,000

Trade creditors 61,000

Sundry creditors 71,000

Bank loans 2,200,000

Debentures 825,000

Other loans 75,000

Lease liabilities 350,000

Current tax payable 52,000

Deferred tax liability 120,000

Provision for annual leave 175,000

Provision for long service leave 100,000

Provision for warranty 48,000

Share capital 5,100,000

General reserve 25,000

Asset revaluation reserve 250,000

Retained earnings 1,835,000

12,994,000 12,994,000

Additional information:

? Bank loans and other loans are all repayable in 3 years time.

? $325,000 of the debentures is repayable within 1 year.

? Lease liabilities include $125,000 repayable within 1 year.

? Investments in other companies are long-term investments.

? Provision for annual leave includes $107,000 payable within 1 year.

? Provision for long service leave includes 12,000 payable within 1 year.

? Provision for warranty includes $23,000 estimated to be incurred within 1 year.