Never use plagiarized sources. Get Your Original Essay on
Question: Sunny Ltd Statement of Changes in Equity for the year ended 30 June 2017 Contributed equit…
Hire Professionals Just from $11/Page
Order Now Click here
Sunny Ltd
Statement of Changes in
Equity
for the year ended 30 June
2017
Contributed equity General reserve Revaluation reserve Retained earnings Total
$ $ $ $ $
Balance at 1 July 2016 344,000 3,954,500
Total
comprehensive income for the year
Issue of ordinary shares as a
result of rights issue
Issue of ordinary shares as a
result of options exercised
Transfer to general
reserve
Inter dividend paid – ord
Final dividend declared –
ord
Final dividend declared –
pref
Balance at 30 June 2017 3,847,000 6,211,000

Section 1 – Presentation of financial statements (10
MARKS)

The adjusted trial balance of Sunny Ltd as at 30 June 2017 is as
follows:    

Sunny Ltd

    Debit

    Credit

        $

         $

Accounts receivable

1,350,000

Asset revaluation reserve as at 1/7/2016

240,000

Asset revaluation reserve (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.)

200,000

Accumulated amortisation – patents & trademarks

25,000

Accumulated impairment loss – goodwill

180,000

Accumulated depreciation –

Plant & machinery

206,000

Fixtures & fittings

47,000

Buildings

40,000

Administrative staff salaries expense

540,000

Advertising expense

120,000

Bank loan (unsecured –short-term repayable due)

40,000

Bank loan (unsecured –long-term repayable amount)

160,000

Carrying amount of plant and machinery sold

24,000

Cost of sales

3,424,000

Deposits at call

120,000

Dividends revenue

43,000

Deferred tax asset

210,000

Debentures held in Emerald Ltd (mature on 30/5/2018)

214,000

Dividends receivable

8,000

Freight inwards

90,000

Freight outwards

115,000

Ordinary shares, fully paid

3,654,000

General reserve

680,000

Goodwill

732,000

Retained profits as at 1/7/2016

750,000

Mortgage loan (secured over land and buildings – due
30/9/2020)

254,000

Accounts payable

472,000

Current tax liabilities

156,000

Provision for long service leave -short term liable

100,000

Provision for long service leave – long term liable

150,000

Deferred tax liability

175,000

Allowance for doubtful debts

77,000

Provision for annual leave

62,000

Freehold land (at fair value)

1,276,000

Buildings (at fair value)

900,000

Long term investment in listed shares as at 1/7/2016

60,000

Long term investment in listed shares (revaluation increment on
30/06/2017)

40,000

Loan to Charlie Ltd (due on 30/6/2020)

220,000

Patents and trademarks

125,000

Plant & machinery – at cost

684,000

Preference shares, fully paid

240,000

Prepayments

40,000

Inventories

1,950,000

Income tax expense

381,000

Final dividend payable

200,000

Fixtures & fittings – at cost

118,000

Cash at bank

530,000

Sales revenue

6,600,000

Sundry revenue

46,200

Sales returns and allowances

12,000

Sales staff salaries and commission expense

500,000

7% debentures – due 30/4/2018 (secured over inventories)

85,000

Proceeds on sale of plant and machinery

40,000

Other administrative expense

370,000

Other selling expense

210,000

Interest expense

68,000

Other expenses

122,000

Underwriting commission and other share issue costs

47,000

Interest revenue

50,000

Interest payable

9,000

Transfer to general reserve

50,000

Interim dividend paid – ord

131,200

Final dividend declared – ord

164,000

Final dividend declared – pref

36,000

Total

14,981,200

14,981,200

                                   

Additional information:

i)         
Included in other administrative expense were:

fees paid to auditor:

                       
25% for audit & review 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 cost
                                             
800,000

Finished goods – at
cost                                      
         1,054,000

Finished goods – at net realisable
value                           
26,000

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
paid                       
240,000

45,000 share
options                                           
   
                   
           
  22,500

iv)        On 14 July 2016, a
rights issue of 1,280,000 ordinary shares were made at $1.25 each.
The underwriting commission and other shares issue costs for the
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, Sunny
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 long-term 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

Prepare a statement of profit or loss and other comprehensive
income for Sunny Ltd for the year ended 30 June 2017 according to
the requirements of AASB 101 (classify expenses by functions). Show
all workings.

Prepare a statement of financial position for Sunny Ltd at 30
June 2017 to comply with AASB 101. Use the current and non-current
presentation format. Show all workings.

Prepare a statement of changes in equity for Sunny 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.

Prepare appropriate notes to the following items:

summary of significant accounting policies –

statement of compliance;

an extract of the basis of accounting and inventories;

           
2)         inventories;

           
3)         long-term
borrowings;

           
4)         auditor’s
remuneration;

Sunny Ltd
Statement of Profit or Loss
and Other Comprehensive Income
For the year ended
30/06/2017
Revenue
Cost of sales
Gross profit
Other revenue
Other income
Selling costs
Administration costs
Other expenses
Finance costs
Profit before income tax
Income tax expense
Profit for the period
Other comprehensive income:
Items that will not be reclassified to
profit or loss
Gain arising during the year on
revaluation of land
200,000
Gain arising during the year on
investments in equity instruments
40,000
Income tax relating to items not
reclassified
( 72,000)
Other comprehensive income during the
year, net of tax
168,000
Total comprehensive income for the
year

Sunny Ltd
Statemnet of Financial
Position
as at 30 June 2017
Current Assets
Cash and cash equivalents
Trade and other receivables
Financial assets
Inventories Note 9
Total Current Assets
Non-Current Assets
Investments in equity instruments
Other financial assets
Property, plant and equipment
Goodwill
Other intangible assets
Deferred tax assets 107,000
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Short-term provisions
Short-term borrowings
Current portion of long-term borrowings 40,000
Current tax liabilities
Total Current Liabilities
Non-Current Liabilities
Long-term borrowings Note 17
Long-term provisions
Total Non-Current Liabilities
Total Liabilities
Net assets
Equity
Contributed capital
Reserves 1,192,000
Retained earnings

Total Equity

Open chat
Lets chat on via WhatsApp
Hello, Welcome to our WhatsApp support. Reply to this message to start a chat.