FNSACC514 : Financial Reports for Corporate Entities - Accounting and Finance Assignment Help

Assignment Task:

TASK:

This summative assessment will enable your assessor to make a judgement of competency based on the submission of your completed assessments against the requirements of the unit/s of competency in this module.
Benchmark
The Assessment Benchmark developed for each unit of competency is the evidence criteria used to judge the quality of performance (i.e. the assessment decision-making rules). Assessors use these benchmarks to make judgements on whether competency has been achieved and to determine if you have performed to the standard expected to meet the unit requirements.
Reasonable Adjustment
Where appropriate Monarch Institute will allow flexibility in the way in which each unit is assessed based on the needs of an individual.
Assessment Coding
Assessment of this course is based on competency-based principles.
S= Satisfactory
NS = Not Satisfactory
If you fail to perform satisfactorily for the assessment in the prescribed way you may be assessed as ‘Not Satisfactory’. You are required to be assessed as ‘Satisfactory’ in all assessments for each unit of competency.
Re-assessment
Your assessment can be submitted after you have reviewed the learning materials and practiced enough to feel confident in your resubmission. You have two weeks from your last submission feedback to resubmit. You are re-assessed in only the areas where your assessor has indicated you were initially assessed as NS. It is at the assessor’s discretion to re-assess the entire assessment should an overall understanding not be demonstrated.  When you are re-assessed as ‘satisfactory’ after re-submission you will achieve competency for this assessment.
Declaration of Understanding and Authenticity
I acknowledge the assessment process has been explained and agree that I am ready to undertake assessment. I am aware of where to find the assessor’s feedback for the assessment. I am aware of the appeals process, should the need arise. I also understand I must be assessed as ‘satisfactory’ in all parts of the assessment/s to gain an overall competent result for the unit/s of competency. If I am found to be NS after a second attempt, it is at the assessor ‘s discretion whether I may be permitted one final attempt. I am aware that a ‘not competent’ final outcome means I may incur fees for re-enrolment in the unit/s.
I certify that the attached material is my original work. No other person’s work has been used without due acknowledgement. I understand that the work submitted may be reproduced and/or communicated for the purpose of detecting plagiarism. I understand a person found responsible for academic misconduct will be subject to disciplinary action (refer to Student Information Guide).
* I understand that by typing my name or inserting a digital signature into this box that I agree and am bound by the above student declaration.
Student Name*: Pooja Varier Date:30/04/21
Submission instructions:
Complete the Declaration of Understanding and Authenticity (above).
Once you have completed all parts of the assessment login to the Monarch Learning Management System (LMS) to submit your assessment.
In the LMS, click on the link to ‘Submit [assessment name]’ in your course and upload your assessment files. Click save and then click submit assignmentPlease be sure to click ‘continue’ after clicking ‘submit assignment’.

Assessment Activities
Short Answer and Worked Answer Questions
The following questions are based on the material in the text “Prepare Financial Reports for Corporate Entities” (3rd or 4th Edition) by Gavin Dumbrell & Damien Kelly.
Activity instructions to candidates
This is an open book assessment activity.
You are required to read this assessment and answer all questions that follow.
Please type your answers in the spaces provided.
Please ensure you have read “Important assessment information” at the front of this assessment
Estimated time for completion of this assessment activity: 2-3 hours
The following questions are based on the material in Chapter 1:
1. List three (3) differences between a small and a large proprietary company?
5473701822451.Large Proprietary – Consolidated revenue not less than $25,000,000 for the Financial yr.
Small Proprietary – Consolidated revenue can be less than $25,000,000 for the Financial.
2. Large Proprietary Consolidated Gross Assets not less than $12,500,000 at the end of the financial yr.
Small proprietary Gross assets can be less than $12,500,000 for the financial yr.
3. Large Proprietary and its controlled entities have 50 or more employees at the end of the FY whereas small proprietary can have less than 50.
001.Large Proprietary – Consolidated revenue not less than $25,000,000 for the Financial yr.
Small Proprietary – Consolidated revenue can be less than $25,000,000 for the Financial.
2. Large Proprietary Consolidated Gross Assets not less than $12,500,000 at the end of the financial yr.
Small proprietary Gross assets can be less than $12,500,000 for the financial yr.
3. Large Proprietary and its controlled entities have 50 or more employees at the end of the FY whereas small proprietary can have less than 50.


The following questions are based on the material in Chapter 2:
2. Rufflander Ltd offered for subscription 300,000 $1 ordinary shares payable in full on application.
All 300,000 shares were applied for and allotted.
Required: Prepare general journal entries to record the share issue. (Ignore dates).
Rufflander Ltd. – General Journal Entries

Date Accounts  Debit Credit
300,000 Debit
Credit Trust Bank
Application – Ordinary Shares  300,000
Receipt of application money   Debit Application – Ordinary Shares 300,000 Credit Share Capital  300,000
Issue of 300,000 $1 fully paid ordinary shares    
Debit Bank 300,000 Credit Trust Bank  300,000
Transfer of application funds to bank    

The following questions are based on the material in Chapter 3:
3. Prepare general journal entries to record the issue of 1,000 $100 8% debentures at par, payable in full on application. (Ignore dates).
Date Account Debit Credit
Debit
Credit Trust Bank
Debenture Holders 1000
1000
Receipt of application money for debentures    
Debit
Credit Debenture Holders
10% Debentures 1000
1000
Issue of Debentures    
Debit
Credit Bank
Trust Bank 1000
1000
Transfer of application funds to bank on issue of debentures
The following questions are based on the material in Chapter 4:
4. Elliot forms a company, Smelliot Ltd, to take over his business as a going concern.
The consideration for the sale of the business is 500,000 shares issued at $1.00 each and $300,000 in cash. The assets and liabilities (in $) of the business were:
Freehold Land and Buildings 400,000
Plant and Equipment 150,000
Motor Vehicles 74,000
Inventory 164,000
Accounts Receivable 125,000
Allowance for Doubtful Debts 15,000
Accounts Payable 115,000
All assets and liabilities are at fair value except accounts receivable that are expected to realise $100,000.
Required: Prepare the general journal entries in the books of Smelliot Ltd to record the purchase of the business and discharge of the purchase consideration.
Cash transactions are to be recorded in the general journal.
Smelliot Ltd. – General Journal
Account Debit Credit
Accounts Receivable 125,000 Inventory 164,000 Land and Buildings 150,000 Motor Vehicles 74,000 Accounts Payable
Vendor- Smelliot Ltd 115,000
500,000
Acquisition of businessVendor- Smelliot Ltd
Bank 500,000 500,000
Payment of Purchase Consideration The following questions are based on the material in Chapter 5:
5 a. Why would a company establish a reserve?
480060170180Reserves can be established for a specific reason or future need, for e.g The dividend equalisation reserve is established to set side amounts for the payment of future dividends if needed. This may arise if profits were less than expected and there were not enough retained earnings to pay usual dividends.
00Reserves can be established for a specific reason or future need, for e.g The dividend equalisation reserve is established to set side amounts for the payment of future dividends if needed. This may arise if profits were less than expected and there were not enough retained earnings to pay usual dividends.

5 b. List three (3) types of reserves which may be established?
4794251619251. General Reserve
2.Dividend Equalisation Reserve
3.Capital profits reserve
001. General Reserve
2.Dividend Equalisation Reserve
3.Capital profits reserve


6. Cool Hats Ltd has paid the following PAYG tax instalments for the year ended 30 June:
September Quarter 11,000
December Quarter 11,000
March Quarter 11,000
June Quarter 11,000
Total 44,000
Taxable income for the year ended 30 June, was $168,000. Company tax rate is 30%.
Required:
Prepare general journal entries to record the company’s income tax instalments and final payment.
Cool Hats Ltd. – General Journals
Date Account Debit Credit
1st QtrIncome Tax Expense
11,000 Current Tax Payable 11,000
PAYG Tax Instalment due for quarter1st QtrCurrent Tax Payable 11,000 Bank 11,000
Payment of PAYG tax instalment for quarter 2nd QtrIncome Tax Expense
11,000 Current Tax Payable 11,000
PAYG Tax Instalment due for quarter2nd QtrCurrent Tax Payable 11,000 Bank 11,000
Payment of PAYG tax instalment for quarter 3rd QtrIncome Tax Expense
11,000 Current Tax Payable 11,000
PAYG Tax Instalment due for quarter3rd Qtr Current Tax Payable 11,000 Bank 11,000
Payment of PAYG tax instalment for quarter 4th QtrIncome Tax Expense
11,000 Current Tax Payable 11,000
PAYG Tax Instalment due for quarter4th QtrCurrent Tax Payable 11,000 Bank 11,000
Payment of PAYG tax instalment for quarter 4th QtrIncome Tax Expense
6400 Current Tax Payable 6400
Additional tax payable for year 4th QtrProfit & Loss Account 50400 Income Tax 50400
Balance transferred The following questions are based on the material in Chapter 6:
7. (a) Describe the difference between the tax payable method and tax effect method of accounting for income tax.
480060167640Under the tax payable method income tax expense for the period is equal to current tax payable whereas under tax effect accounting income tax expense is more closely aligned to accounting profit through recognition of deferred tax assets and deferred tax liabilities. AASB 112 prescribes the use of the tax effect accounting but non-reporting entities may still use the tax payable method.
00Under the tax payable method income tax expense for the period is equal to current tax payable whereas under tax effect accounting income tax expense is more closely aligned to accounting profit through recognition of deferred tax assets and deferred tax liabilities. AASB 112 prescribes the use of the tax effect accounting but non-reporting entities may still use the tax payable method.

(b) Provide two (2) examples of items treated differently under the two methods, that is, treated differently under the accounting treatment and the tax effect method.
Item Accounting treatment Tax treatment
1. Receipt of exempt
Income Recognised as Income Not assessable Income
2. Penalties and fines Recognised as an expense when incurred Not an allowable deduction
(c) Which method must be used by reporting entities?
479425164465AASB 112 prescribes the use of the tax effect accounting00AASB 112 prescribes the use of the tax effect accounting

8. Prepare the tax effect Journal Entries for the following independent situations and explain why each gives rise to a Deferred Tax Asset or a Deferred Tax Liability at June 2016.
Tax Rate is 30%.
Enter your answers in the grids provided.
The current period Doubtful Debts expense for a company was $9,000. The balance in the Allowance for Doubtful Debts account at the beginning of the period was $7,000. During the current period $6,000 of Bad Debts had been written off against the Allowance for Doubtful Debts.
Account Debit Credit
Doubtful debts $8000 Allowance for doubtful debt $8000
Explanation: 9000-7000=200
+6000=8000
A publishing company has received $20,000 of subscriptions in advance of publications. This revenue will be recognised in the accounting records over the next four years. This amount is treated as assessable income for income tax purposes.
Account Debit Credit
$1500 $1500
Explanation: Plant and Machinery was acquired for $200,000 on 1 July 2015. Accounting depreciation is 25% p.a. and tax depreciation is 30% p.a.
Account Debit Credit
Tax $140,000 Tax $140,000
Explanation: Carrying amount (200000-50000) = 150,000
Less future taxable amount = 150,000
Plus future deductible amount (tax depreciation) (200000-60,000) = 140,000

The following questions are based on the material in Chapter 7:
9. (a) Tommy Company Ltd provided the following information in regard to its operations for the year ended 30 June 2016:
Cash Book
Opening balance 324,000 Accounts Payable 144,000
Accounts Receivable 260,000 Bills Payable (suppliers) 16,000
Dividends Received 18,000 Land and Buildings 270,000
6% Debentures 50,000 Other Operating Expenses 188,000
Interest Income 20,000 Petty Cash 3,000
Machinery 41,000 Dividend paid 40,000
Share Capital 200,000 Provision for Holiday Pay 24,000
Salaries & Wages 101,000
Current Tax Payable 22,000
Closing balance 105,000
$913,000 $913,000
Required: Prepare a Cash Flow Statement for the financial year ended 30 June 2016, including the required reconciliation of cash.
( a )Statement of Cash Flows for Financial Year Ended 30 June 2016
( i ) Cash flows from Operating Activities
Receipts from Customers $260,000 Dividends Received $18,000 Interest Income $20,000 Payments to Suppliers -$16,000 Payments to Employees -$101,000 Taxation Paid -$22,000 Other Operating Expenses -$188,000 Net cash used in Operating Activities $29,000
( ii ) Cash flows from Investing Activities
Proceeds from disposal of Machinery $41,000 Purchase of Property, Plant & Equipment -$270,000 Net cash used in Investing Activities -$229,000
( iii ) Cash flows from Financing Activities
Proceeds of Share Issue $200,000 Proceeds of Debenture Issue $50,000 Dividends Paid -$40,000 Net Cash from Financing Activities $210,000
Net decrease in cash and cash equivalents $10,000
Cash and cash equivalents at beginning $324,000
Cash and cash equivalents at end of year $334,000
Reconciliation of cash and cash equivalents
Cash at bank $331,000
Petty cash on hand $3000
Cash and cash equivalents at end of year $334,000
9(b) An extract from the Statements of Financial Position of Catbird Ltd showed the following for the years ended 30 June 2016 and 30 June 2017 were:
30 June 2016 30 June 2017
$ $ $ $
Current Assets Accounts Receivable 60,000 70,000 Allowance for Doubtful Debts – 5,000 55,000 – 5,000 65,000
Bank 21,000 16,000
Bills Receivable (from debtors) 0 8,000
Inventory 104,000 100,000
Current Liabilities Accounts Payable 40,000 36,000
Current Tax Payable 30,000 33,000
Final Dividend Payable 32,000 40,000
Provision for Annual Leave 20,000 17,000
Additional Information:
Net profit after taxation is $200,000 in 2017. This profit was determined after accounting for the following income and expense items:
Depreciation $22,000
Profit on sale of non-current asset $2,000
Net cash from operating activities for the year ended 30 June 2017 is $202,000.
Required:
For the year ended 30 June 2017, complete the reconciliation of cash flows from operating activities with net profit.
Catbird Ltd - Reconciliation to determine cash flows from operating activities:
Net Profit after Tax 200,000
+ / - Add (subtract) Non-Cash Items: Depreciation 22,000 Allowance for doubtful debt (5000-5000) 0 22,000
Changes in Current Assets and Liabilities Trade Receivable Increase 18,000 Inventory Decrease -4,000 Accounts Payable -4,000 Final Dividend payable Increase 8000 Current Tax payable 3,000 Provision of Annual Leave 3,000 Net cash from Operating Activities $202,000

The following questions are based on the material in Chapter 8:
10. Lozza Limited had the following trial balance as at 30 June 2016:
Account $ $
Cash at Bank 81,000 Cash on Hand 3,500 Land & Buildings 1,920,000 Accounts Receivable 269,300 Plant & Equipment 267,000 Goodwill 220,000 Allowance for Doubtful Debts 5,200
Accumulated Depreciation – Buildings 76,000
Shares in Private Companies 110,000 Accrued Income 8,900 Raw Materials 47,600 Work in Progress 36,000 Accumulated depreciation – Plant & Equipment 58,000
Accumulated Impairment – Goodwill 22,000
Spare Parts 7,400 Prepaid Expenses 15,600 Licenses 85,000 Finished Goods 286,500 Accumulated Amortisation – Licenses 34,000
Shares in Listed Companies 370,000 Deferred Tax Assets 58,000 Deferred Tax Liabilities 21,000
Bills Receivable 82,000 Deposits at Call 50,000 Other Liabilities (current) 654,000
Retained Earnings 2,047,600
Share Capital 1,000,000
Total 3,917,800 3,917,800
Additional Information:
? A $30,000 bill of exchange is due on 15 March 2018. All other bills are due before December 2016.
? Impairment testing has revealed that further impairment losses of $11,000 on goodwill and $17,000 on licences are to be recorded.
? On 30 June 2016, land & buildings were re-valued at $2,400,000 by an independent valuer.
? All inventories are recorded in the ledger at cost.
? The market value of shares in listed companies as at 30 June 2016 was $420,000.
? Director’s estimate that the shares in private companies are worth $145,000.
? Tax rate is 30%.
Required:
(a) Complete a Statement of Financial Position as at 30 June 2016.
(b) Complete notes accompanying the Statement of Financial Position for assets.
Tips:
We suggest you follow these steps in completing your answer:
1. Transfer all of the items from the Trial Balance items to the respective "(b) Notes to Statement of Financial Position". 
Now transfer the total from each "Note" at (b) to the "(a) Statement of Financial Position". 
Total the "(a) Statement of Financial Position" and ensure that it balances.
2. Next, one at a time, process each "Additional Information" adjustment and record each adjustment in the relevant "Note" at (b). 
Now, transfer the revised total of any adjusted "Notes" to the "Statement of Financial Position". You may need to revise some values in the "Statement of Financial Position" that you previously reported (in Step 1).
After processing each adjustment, again total the "Statement of Financial Position" and ensure that it balances. 
3. Any income or expense adjustments should be posted to Retained Earnings.
4. Any revaluation adjustment should be applied to the asset value after allowing for accumulated depreciation. This also means that any accumulated depreciation is reset to nil upon revaluation of the asset.

Statement of Financial Position of Lozza Limited at 30 June 2016
ASSETS CURRENT ASSETS Note: $ Cash and cash equivalents 1 $84,500 Trade and other receivables 2 $351,300 Inventories 3 $370,100 Other Current Assets 4 $15,600 $821,500
NON CURRENT ASSETS Available for sale investments 5 $420,000 Other financial assets 6 $145,000 Property plant and equipment 7 $2,533,000 Goodwill 8 $198,000 Other intangibles 9 $51,000 Other non-current assets 10 $82,000 $3,429,000
TOTAL ASSETS $4,250,500
CURRENT LIABILITIES Other Current liabilities $654,000 NON CURRENT LIABILITIES Deferred tax liabilities 11 $21,000 TOTAL LIABILITIES $6,75,000
NET ASSETS $3,575,500
EQUITY Share capital $1,000,000 Reserves 12 $2,400,000 Retained Earnings $2,047,600 TOTAL EQUITY $5,447,600

(b) Notes to Statement of Financial Position
1. Cash and cash equivalents Cash at bank 1 $81,000 Cash on hand 1 $3500 At call deposit $50,000 $134,500
2. Trade and other receivables Trade Receivables $269,300 Allowance for Doubtful Debts $-52,000 $264,100 Bills Receivable ( due 12/16) $82,000 $346,100
3. Inventories Raw Materials at cost $47,600 Work in Progress at cost $36,000 Finished Goods at cost $2,86,500 $3,70,100
4. Other current assets Spare parts $7,400 Accrued Income $8,900 Prepayments $15,600 $31,900

(b) Continued…..Notes to Statement of Financial Position
5. Available for sale investments Shares in Listed Companies - at market value (Cost $370,000) $420,000
6. Other Financial Assets Shares in Private Companies - at Directors’ value (Cost $110,000) $370,000
7. Property, plant & equipment Land & Buildings ( revalue 30/06/16 ) independent valuer $2,400,000 Plant & Machinery (at cost) $267,000 Less Accumulated Depreciation $-58,000 $209,000 $2,609,000
8. Goodwill Goodwill (at cost) $220000 Less Accumulated Impairment $-22000 $198000
9. Other Intangible Assets Licenses (at cost) $85000 Less Accumulated Amortisation $-34000 $51000
10. Other Non-Current Assets Bills Receivable ( due 15/03/18 ) $30000
11. Deferred Tax Liabilities Deferred Tax Labilities $21000 Revaluation Land, Buildings $2400000 Revaluation Shares $565000 Deferred Tax Assets $58,000 $3044000
12. Reserves Asset Revaluation Reserve - buildings $2400000 - shares in listed companies $420000 - shares in private companies $145000 - tax effect of revaluations $-889500 $2075500

The following questions are based on the material in Chapter 9:
11. Dynamite Limited has determined its explosive division is a cash generating unit.
The carrying amount of the assets at 30 June 2016 is:
Building 105,000
Land 75,000
Equipment 60,000
Inventory 30,000
The fair value of the assets at 30 June 2016, unless stated otherwise, is the same as their respective carrying amounts.
Dynamite calculated the value in use of the division as $260,000.
Required: Provide the workings and journal entries for the impairment loss of the division assuming that the fair value of the land is:
(a) $70,000
(b) $62,500
( a ) Workings:
Carrying Value $ Fair Value $
Building 105,000 Land 75000 70000
Equipment 60000 Inventory 30000 Total 265000 $
Carrying Value 265000
Less Recoverable amount 260000
Impairment Loss 5000
Journal:
DR CR
Impairment loss 5000 Accumulated Impairment loss 5000
Narration: Journal entries to account for impairment loss under AASB136
( b )
Carrying Value $ Fair Value $
Building 105000 Land 75000 62500
Equipment 60000 Inventory 30000 Total 270000 62500
$
Carrying Value 270000
Less Recoverable amount 2575000
Impairment Loss 12500
Journal:
DR CR
Impairment Loss 12500 Accumulated Impairment Loss 12500
Narration: Journal entries to account for impairment loss under AASB136

12. The acquired goodwill value for Sovereign Ltd is $73,000. The goodwill is tested for impairment and the appropriate carrying amounts were established at:
30 June 2015 $68,000
30 June 2016 $73,000
30 June 2017 $63,000
Required:
Journal entries, if necessary, to account for any goodwill impairment at 30 June of each year.
Sovereign Ltd.
Date Account Debit Credit
30 June 2015 Goodwill impairment loss $5,000 Accumulated Impairment $5000
Impairment allowance for the year(73,000-68,000) Profit & Loss $5,000 Goodwill Impairment Loss $5,000
Balance transferred
30 June 2016Hint: Carefully consider whether you think a journal is required at 30/6/16.
-72390386080No journal entry is required, as recognition of any increase (reversal) in the carrying amount of goodwill, other than at acquisition, is not allowed.
00No journal entry is required, as recognition of any increase (reversal) in the carrying amount of goodwill, other than at acquisition, is not allowed.
Provide your explanation if no journal is required:

Date Account Debit Credit
30 June 2017 Goodwill Impairment loss $10,000 Accumulated Impairment $10,000
Impairment allowance for the year(73,000-63,000) Profit & Loss $10,000 Goodwill Impairment Loss $10,000
Balance transferred
The following questions are based on the material in Chapter 10:
13. Red Limited acquired 100% of the issued capital of Yellow Limited on 1 July 2015 for $80,000.
At that date the shareholders’ equity of Yellow Limited was:
Share Capital $60,000
Reserves $15,000
Retained Earnings $ 5,000
Required:
(a) Prepare the journal entry to eliminate the investment in Yellow Ltd by Red Ltd.
Date Account Debit Credit
30 June 2016 Share Capital $60,000 Retained Earnings $5000 General Reserves $15,000 Inv in subsidiary in full $80,000
Journal entry to eliminate the investment in Yellow Ltd by Red Ltd. (b) Complete the worksheet extract, as at 30 June 2016.
Worksheet extract
as at 30 June 2016 Red Ltd Yellow Ltd Eliminations ConsolidationBalance
Dr Cr Operating Profit after tax 48,000 33,000 Retained Earnings 01/07/15 20,000 5,000 5,000 20,000
68,000 38,000 Appropriations 28,000 14,000 Retained Earnings 30/06/16 40,000 24,000 Share Capital 200,000 60,000 60,000 200,000
Reserves 72,000 15,000 15,000 72,000
Shares in Yellow Ltd 80,000 80,000 0

The following questions are based on the material in Chapter 8:
14. The following relates to Roberto Limited for the year ended 30 June 2017:
Sale of goods $2,050,000
Interest income 12,500
Consultancy fees received 60,000
Cost of sales 325,000
Finance costs 44,500
Distribution expenses 60,000
Marketing expenses 115,000
Warehouse services expenses 250,000
Administration expenses 55,000
Other expenses 110,000
Income tax expense 440,000
Additional information:
The balance of the asset revaluation Reserve at 1 July 2016 was $40,000. On 30 June 2017 the carrying value of land was restated to a directors’ valuation resulting in a credit to the asset revaluation Reserve of $150,000. Assume a company tax rate of 30%.
Retained earnings at 1 July 2016 $150,000
As at 1 July 2016 there were 400,000 fully paid ordinary shares on issue $400,000
Dividends paid and proposed during the FY:
Interim dividend paid, fully franked $30,000Final dividend proposed, fully franked $22,500Transfer from retained earnings to General Reserve $35,000
General Reserve at 1 July 2016 $nil
During the FY, a further $100,000 ordinary shares were issued and fully paid on application $100,000Pending legal action against the company for infringement of a patent for $500,000. Directors’ don't believe that this action will be successful.
One of the directors provided warehouse services for $50,000 in the current financial year. The service was provided at arm’s length. This transaction has already been included the financial values provided in the table (above).
Required: Prepare the following:
a Statement of Comprehensive Income,
a Statement of Changes in Equity and
Notes to the Financial Statements at 30 June 2017.
 

Roberto Limited
Statement of Comprehensive Income for the year ended 30 June 2017
Note $
Sales revenue Note 1 2,050,000
Cost of goods sold 325,000
Gross Profit 1,725,000
Other income Note 1 -72500
Finance costs Note 2 -44,500
Distribution costs -60,000
Marketing costs -115,000
Warehouse services costs -250,000
Administration costs -55,000
Other expenses -110,000
Profit before income tax 1,163,000
Income tax expense 440,000
Profit after tax 723,000
Other comprehensive income:
Gain on revaluation of land 150,000
Income tax on revaluation of land -45,000
Total other comprehensive income 105,000
Total comprehensive income 828,000
Statement of Changes in Equity – Roberto Ltd.
For the year ended 30 June 2017
Notes Share capital$ Revaluation reserve
$ General reserve
$ Retained earnings$ Total equity
$
Balance at 1 July 2016 400,000 150,000 0 150,000 700,000
Total comprehensive income for the year 40,000 723,000 763,000
Transfer to/from reserves 35,000 (35,000) Transactions with owners:
Issue of share capital 100,000 100,000
Dividends provided for or paid 5 (52,500) Total transactions with owners 100,000 (52,500) 47,500
Balance at 30 June 2017 500,000 190,000 35,000 785,500 1,510,500
 Notes to the financial statements (extract):
For the financial year ended 30 June 2017
1. Revenue
Sale of goods 2,050,000$
Other income:
Interest income 12,500$
Consultancy fees received 60,000$
Total other income 72,500$
Total revenue 2,122,500$
2. Related parties
{One of the directors provided warehouse service for $50,000
3. Reserves
Asset revaluation reserve
General reserve
Movement in reserves:
Asset revaluation reserve
Balance at 1 July 2016
Revaluation of land
Tax effect on revaluation
Balance at 30 June 2017
$
$
$
$40,000
$150,000
- $45,000
$105,000
4. Contingent Liabilities
{A contingent liability exit in respect of pending lawsuit against the company for infringement of a patient for $500,000. Directors don’t believe the action will be successful}

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