the adjusted trial balance of snake ltd as at 30 june 2017 is as follows debit credi 594288
The adjusted trial balance of Snake Ltd as at 30 June 2017 is as follows:
Debit Credit
$$
Accounts receivable1,350,000
Asset revaluation reserve440,000
Accumulated amortisation – patents & trademarks25,000
Accumulated impairment loss – goodwill180,000
Accumulated depreciation –
Plant & machinery206,000
Fixtures & fittings47,000
Buildings40,000
Administrative staff salaries expense540,000
Advertising expense120,000
Bank loan (unsecured – repayable in annual instalments of $40,000)200,000
Carrying amount of plant and machinery sold24,000
Cost of sales3,424,000
Deposits at call120,000
Dividends revenue43,000
Deferred tax asset210,000
Debentures held in Emerald Ltd (mature on 30/6/2018)214,000
Dividends receivable8,000
Freight inwards90,000
Freight outwards115,000
Ordinary shares, fully paid3,654,000
General reserve680,000
Goodwill732,000
Retained profits – 1/7/2016750,000
Mortgage loan (secured over land and buildings – due 30/9/2020) 254,000
Accounts payable472,000
Current tax liabilities156,000
Provision for long service leave (only 40% is currently eligible)250,000
Deferred tax liability175,000
Allowance for doubtful debts77,000
Provision for annual leave62,000
Freehold land (at fair value)1,276,000
Buildings (at fair value)900,000
Listed investments – at fair value100,000
Loan to Charlie Ltd (due on 30/6/2020)220,000
Patents and trademarks125,000
Plant & machinery – at cost684,000
Preference shares, fully paid240,000
Prepayments40,000
Inventories1,950,000
Income tax expense381,000
Final dividend payable200,000
Fixtures & fittings – at cost118,000
Cash at bank530,000
Sales revenue6,600,000
Sundry revenue46,200
Sales returns and allowances12,000
Sales staff salaries and commission expense500,000
7% debentures – due 30/4/2018 (secured over inventories)85,000
Proceeds on sale of plant and machinery40,000
Other administrative expense370,000
Other selling expense210,000
Other expenses (included interest expense of $68,000)190,000
Underwriting commission and other share issue costs47,000
Interest revenue50,000
Interest payable9,000
Transfer to general reserve50,000
Interim dividend paid – ord131,200
Final dividend declared – ord164,000
Final dividend declared – pref36,000-
14,981,20014,981,200
Additional information:
i)Included in other administrative expense were:
fees paid to auditor (25% for audit & reWhite
of financial reports & 75% for non-audit
consulting services)$60,000
fees paid to related practice of the auditor (for
legal services)$12,000
ii)Inventories, $1,950,000, comprised of:
Raw material – at cost$70,000
Work in progress – at cost800,000
Finished goods – at cost1,054,000
Finished goods – at net realisable value26,000
Finished goods are valued at the lower of cost and net realisable value on a weighted average basis.
iii)Contributed equity as at 1 July 2016 consisted of:
2,000,000 ordinary shares issued at $1 each, fully paid$ 2,000,000
100,000 15 % preference shares issued at $2.40 each, fully paid240,000
45,000 share options22,500
iv)On 14 July 2016, a rights issue of 1,280,000 ordinary shares were madeat $1.25 each. The underwriting commission and other shares issue costs forthe issue amounted to $15,000. The shares issued ranked equally with existing shares for dividend.
v)On 29 May 2017, the 45,000 share options were exercised and 45,000 ordinary shares were allotted at an exercise price of 70 cents each. The allotted shares did not rank for dividend until 2018.
vi)On 17 June 2017, freehold land was revalued to its fair value of $1,276,000 from its carrying amount of $1,076,000. The related deferred tax has been accounted.
vii)On 28 June 2017, Snake entered into a contract with Magnet Ltd for the construction of three new machines at a cost of $245,000 each. The company expects to take delivery of the first machine in January 2018, and the rest in February 2016.
viii)On 30 June 2017, listed investments were revalued to their fair value. They were purchased at a cost of $60,000 in May 2016 and are classified as investments in equity instruments. The related deferred tax liability had been accounted.
Note:Loan receivables and held-to-maturity investments (such as debentures held in another entity) are to be classified as other financial assets.
ix)An amount of $50,000 was transferred to general reserve from retained earnings.
x)Accounting policies adopted are consistent with those of the previous year.
xi)Tax rate is 30%
Required
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Prepare a statement of profit or loss and other comprehensive income for Snake Ltd for the year ended 30 June 2017 according to the requirements of AASB 101 (classify expenses by functions). Show all workings.
(Note: You will get zero mark if you prepare an internal statement – see demonstration problems 1 & 2 on pages 648 – 658.)
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Prepare a statement of financial position for Snake Ltd at 30 June 2017 to comply with AASB 101. Use the current and non-current presentation format. Show all workings.
(Note: You will get zero mark if you prepare an internal statement – see demonstration problems 1 & 2 on pages 648 – 658.)
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Prepare a statement of changes in equity for Snake Ltd for the year ended 30 June 2017 according to the requirements of AASB 101. Show the dividends per share on the statement. Show all workings.
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Prepare appropriate notes to the following items:
1)summary of significant accounting policies – an extract of the basis of accounting and inventories;
2)inventories;
3)long-term borrowings;
4)auditor’s remuneration;
5)commitments.