The following trial balance has been extracted from the books of Grange Co. as at 31 December 2017. $'000 $'000 Administrative expenses 335 Distribution costs 380 Share capital $ 1 355 Share premium 100 Revaluation surplus 20 Dividend paid 35 Cash at bank and in hand 5 Receivables 283 Interest paid 45 Dividends received 30 Interest received 2 Land and buildings at cost (land 420, buildings 150) 570 land and buildings: accumulated depreciation 80 Pant and machinery at cost 480 Plant and machinery : accumulated depreciation 180 Retained earnings account (at January 1, 2017) 240 Purchases 1360 Sales 2544 Inventory at January 1, 2017 180 Trades payables 27 Bank loan 95 3673 3673 Additional notes: 1. Inventory at December 31, 2017 was valued at a cost of $105,000. Included in this balance were goods that had cost $25,0000. These goods had become damaged during the year and it is considered that the goods could be sold for $10,000, after paying commission of $500. 2. Depreciation for the year to December 31, 2017 is to be charged against cost of sales as follows: Buildings 8% on cost (straight line) Plant and machinery 30% on carrying amount (reducing balance) 3. Land is to be revalued upwards by $150,000. 4. Income tax of $175,000 is to be provided for the year to December 31, 2017. 5. The bank loan is repayable in four (4) years’ time. Required: Complying as far as possible with the provision of IAS1 Presentation of Financial Statements and other relevant International Accounting Standards, prepared for publication: a) The company’s Statement of Income & Other Comprehensive Income for the year ended 31 December 2017. b) The company’s Statement of Financial Position as at the year ended 31 December 2017.
The following
|
|
$'000 |
$'000 |
|
Administrative expenses |
335 |
|
|
Distribution costs |
380 |
|
|
Share capital $ 1 |
|
355 |
|
Share premium |
|
100 |
|
Revaluation surplus |
|
20 |
|
Dividend paid |
35 |
|
|
Cash at bank and in hand |
5 |
|
|
Receivables |
283 |
|
|
Interest paid |
45 |
|
|
Dividends received |
|
30 |
|
Interest received |
|
2 |
|
Land and buildings at cost |
|
|
|
(land 420, buildings 150) |
570 |
|
|
land and buildings: |
|
80 |
|
Pant and machinery at cost |
480 |
|
|
Plant and machinery : accumulated depreciation |
|
180 |
|
|
|
240 |
|
Purchases |
1360 |
|
|
Sales |
|
2544 |
|
Inventory at January 1, 2017 |
180 |
|
|
Trades payables |
|
27 |
|
Bank loan |
|
95 |
|
|
3673 |
3673 |
Additional notes:
1. Inventory at December 31, 2017 was valued at a cost of $105,000. Included in this balance were goods that had cost $25,0000. These goods had become damaged during the year and it is considered that the goods could be sold for $10,000, after paying commission of $500.
2. Depreciation for the year to December 31, 2017 is to be charged against cost of sales as follows:
Buildings 8% on cost (straight line)
Plant and machinery 30% on carrying amount (reducing balance)
3. Land is to be revalued upwards by $150,000.
4. Income tax of $175,000 is to be provided for the year to December 31, 2017.
5. The bank loan is repayable in four (4) years’ time.
Required:
Complying as far as possible with the provision of IAS1 Presentation of Financial Statements and other relevant International Accounting Standards, prepared for publication:
a) The company’s Statement of Income & Other Comprehensive Income for the year
ended 31 December 2017.
b) The company’s Statement of Financial Position as at the year ended 31 December 2017.
Note: Show all workings
An income statement is a financial report that indicates the revenue and expenses of a business. It also indicates when a business is a profitable or losing money for a given time span. The income statement, including the balance sheet and cash flow statement, aids in the understanding of the company's financial performance.
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