Prepare a statement of changes in equity for simpsons ltd

Assignment Help Cost Accounting
Reference no: EM131292701

Problem # 1

The trial balance of Simpsons Ltd at 30 June 2018 was as follows:

 

 

 

Debit

 

Credit

 

 

Share capital (ordinary shares issued at $2, fully paid)

General reserve

Retained earnings (1/7/17)

Revaluation surplus

Mortgage loan

Bank overdraft (at call)

7% debentures

Interest payable

Accounts payable

Dividend payable

Current tax liability

Provision for employee benefits

Deferred tax liability

Allowance for doubtful debts

Accumulated depreciation - plant and equipment

Accumulated impairment - goodwill

Cash

Accounts receivable

Inventory

Prepaid insurance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$       750

87 000

131 550

10 500

 

 

$  300 000

37 500

155 100

127 500

375 000

103 800

120 000

4 200

104 250

15 000

78 150

51 300

27 600

19 200

63 750

15 000

 

 

 

Plant and equipment

Land

Buildings

Goodwill

Deferred tax asset

Sales revenue

Cost of sales

Administrative expenses

Other expenses

Interest revenue

Dividends revenue

Income tax expense

Dividends paid

Dividends declared

 

 

333 750

330 000

570 000

157 500

14 700

 

675 000

397 500

15 000

 

 

75 600

30 000

15 000

 

 

 

 

 

 

 

 

1 237 500

 

 

 

3 750

5 250

 

 

 

                

 

 

 

 

$2 843 850

 

 

$2 843 850

 

Additional information

(a) Administrative expenses for the year include interest expense of $43 050.

(b) All assets are carried at cost, except for land and buildings which are carried at valuation.

(c) During the year, 75 000 shares were issued at an issue price of $2 each, payable in full on application.

(d) On 30 June 2018, the directors revalued land and buildings. The revaluation was based on an independent valuation received from FJ Holden, Registered Valuer. The valuation was based on fair values. The carrying amounts of land and buildings before the revaluation were $292 500 and $525 000 respectively.

(e) The mortgage loan is repayable in annual instalments of $75 000 due on 1 March each year.

(f) The 7% debentures are to be redeemed on 31 March 2019. There is no plan to refinance these debentures in the future.

(g) The provision for employee benefits consists of:

 

Annual leave

Long-service leave

$27 000

24 300

(h) No employee is eligible for long-service leave until 2022.

(i) The company tax rate is 30%.

Required

A. Prepare a statement of profit or loss and other comprehensive income for Simpsons Ltd for the year ended 30 June 2018, according to the requirements of AASB 101 (classify expenses by function).

B. Prepare a statement of financial position for Simpsons Ltd as at 30 June 2018 to comply with AASB 101.

C. Prepare a statement of changes in equity for Simpsons Ltd for the year ended 30 June 2018, according to the requirements of AASB 101.

Problem # 2

Killer Ltd has determined its accounting profit before tax for the year ended 30 June 2017 to be $263 000. Included in this profit are the following items.

 

Interest Receivable  1000
Annual leave expense (45 000)
Depreciation expense - buildings (8 000)
Depreciation expense - plant (22 500)
Doubtful debts expense (4 500)
Insurance expense (7 000)

The company's draft balance sheet at 30 June 2017 showed the following:

 

Assets

 

 

Cash

 

$   1 500

Interest Receivable

 

1 000

Accounts receivable

$ 21 500

 

Less allowance for doubtful debts

(4 000)

17 500

Inventory

 

32 000

Prepaid insurance

 

4 500

Land

 

75 000

Buildings

170 000

 

Less Accumulated depreciation

(60 000)

110 000

Plant

150 000

 

Less Accumulated depreciation

(67 500)

82 500

Deferred tax assets as at 1 July 2016

 

10500

 

 

334 500

 

 

 

Liabilities

 

 

Accounts payable

 

25 000

Provision for annual leave

 

10 000

Loan

 

140 000

Deferred tax liabilities as at 1 July 2016

 

10800

 

 

$185 800

 

 

 

 

Additional information

a) The tax depreciation rate for plant (purchased 3 years ago for $150 000) is 20%.Buildings are depreciated over the same number of years for tax and accounting purposes.

b) During the year, the following cash amounts were paid:

 

 

 

Annual leave

$52 000

Insurance

6 500

Annual leave and insurance payments are only deductible for tax purposes when paid.

c) Bad debts of $2 500 were written off against the allowance for doubtful debts during the year. Bad debts are only deductible for tax purposes when written off.

d) The deferred tax balances at 30 June 2016 were:
a. Deferred tax assets $10,500
b. Deferred tax liabilities $10,800

e) The company tax rate is 30%.

Required

Complete the following for Killer Ltd for 30 June 2017:

1. Current Tax Worksheet (template provided)

2. Deferred Tax Worksheet (template provided)

3. Tax Journal Entries

Attachment:- Template.rar

Verified Expert

In this solution we have calculated the profit before tax and after tax of the company and also changes in the equity share taken place during the year is calculated. In the second part of the project we have calculated the accounting profit and current tax liability. There after we have calculated differed tax asset and liability.

Reference no: EM131292701

Questions Cloud

Internet for current articles about health care : Search the Internet for current articles about health care reimbursement models. In a two to three-page paper, address the following issues:
What is likely effect on weighted average cost of capital : What is the likely effect on the weighted average cost of capital? What might be the impact on firm risk, and the perception of the firm's credit rating?
What percentage of new jobs require postsecondary education : What percentage of new jobs require postsecondary education?- Are communication skills acquired by nature or by nurture? explain.
Are there ethical implications to disclosure of unaudited : Are there ethical implications to the disclosure of an unaudited non-GAAP financial measure? Do you believe the SEC should be more strictly regulating this disclosure or should a company have the freedom to disclose as it wishes?
Prepare a statement of changes in equity for simpsons ltd : Corporate Accounting (BBAC401) - Prepare a statement of profit or loss and other comprehensive income for Simpsons Ltd for the year ended 30 June 2018, according to the requirements of AASB 101 (classify expenses by function).
Readings of elevated blood pressure : The patient comes to the physician's office for an annual physical, and two readings of elevated blood pressure are found. The physician requests the patient to return to the office in two weeks after the patient follows certain dietary and exerci..
Trends in workplace that affect business communicators : List seven trends in the workplace that affect business communicators. Be prepared to discuss how they might affect you in your future career.
The net cash flows provided by operating activities : Below are the February transactions for Patricia Co. Received $3,750 for services provided from clients who paid cash. Acquired cash of $25,000 by issuing common stock. Calculate (1) the February 28 cash balance, (2) the amount of net income for Febr..
Capability for organizational performance : Explain how to develop improvement capability for organizational performance.

Reviews

inf1292701

11/28/2016 6:48:37 AM

This is to acknowledge that i have received the answers. I have checked them and find them accurate. Thanks for following the required structure. Good work.

len1292701

11/28/2016 1:56:17 AM

Journal Entries (based on the calculations from the tax worksheets) 2 (2 marks) All journal entries made for current tax liabilityand deferred taxes are correct(1 mark). Appropriate narrations are provided for the journal entries (1 mark). (1.5 – 1 marks) 2 mistakes are made in relation to the journal entries and narrations (1 mark) (0-0.5marks) Lack of understanding in relation to journal entries and narrations .

len1292701

11/28/2016 1:56:10 AM

Workings (calculations of tax base, temporary differences and deferred tax assets and liabilities) 7 (5 – 7 marks) Shows good understanding of calculation of tax bases, temporary differences and deferred tax asset/liability (0.5 marks each) e.g. 4 mistakes are made with calculation of tax bases, temporary differences and deferred taxes (5 marks). (3 – 4.5 marks) Shows satisfactory understanding of calculation of tax bases, temporary differences and deferred tax asset/liability (0.5 marks each) e.g. 8 mistakes are made with calculation of tax bases, temporary differences and deferred taxes (3 marks). (0 – 2.5 marks) Shows lack of an understanding of calculation of tax bases, temporary differences and deferred tax asset/liability. e.g. Less than 8 individual items added back or deducted from accounting profit are correct.

len1292701

11/28/2016 1:56:03 AM

Workings (calculations of taxable income based on accounting income and of current taxable liability) 6 (4 – 6 marks) Shows good understanding of calculation of taxable income based on accounting profit (0.5 marks each item) e.g. 4 mistakes are made with respect to individual items added back or deducted from accounting profit (4 marks). (2.5 – 3.5 marks) Shows satisfactory understanding of calculation of taxable income based on accounting profit (0.5 marks each item) e.g. 6 mistakes are made with respect to individual items added back or deducted from accounting profit (3 marks). (0 – 2 marks) Show lack of an understanding of calculation of taxable income based on accounting profit. e.g. Less than 5 individual items added back or deducted from accounting profit are correct.

len1292701

11/28/2016 1:55:48 AM

Statement of Changes in Equity 5 (3.5 – 5 marks) The presentation and format of the financial statement is in accordance with AASB 101, including name of the entity, name of the statement, year and comparatives if relevant. All changes are appropriately shown for all equity accounts. Totals are correctly calculated and appropriately highlighted. (1.5 – 3 marks) The presentation and format of the financial statement is reasonably in accordance with AASB 101, including name of the entity, name of the statement, year and comparatives if relevant. Some changes are appropriately shown for equity accounts. Some totals are correctly calculated and appropriately highlighted. (0 – 1 marks) The presentation, format and calculations in the financial statement are not in accordance with AASB 101 guidance.

len1292701

11/28/2016 1:55:33 AM

Statement of Financial Position 5 (3.5 – 5 marks) The presentation and format of the financial statement is in accordance with AASB 101, including name of the entity, name of the statement, year and comparatives if relevant. Totals are correctly calculated and appropriately highlighted. All items are aggregated/disaggregated appropriately and correctly classified as current/non-current. Minimum line items as specified by AASB 101 arepresented appropriately. The balance between total assets and total equity is achieved.

len1292701

11/28/2016 1:54:52 AM

Statement of Profit and Loss and Other Comprehensive Income 5 (3.5 – 5 marks) The presentation and format of the financial statement is in accordance with AASB 101, including name of the entity, name of the statement, year and comparatives if relevant. Gross profit, net profit and other comprehensive income figures are correctly calculated. All items areaggregated/disaggregated appropriately. Minimum line items as specified by AASB 101 are presented appropriately. (1.5 – 3 marks) The presentation and format of the financial statements is reasonably in accordance with AASB 101 with some items not included. Some of the calculations for gross profit, net profit and other comprehensive income figures are correct. Some items are aggregated/disaggregated appropriately. Some minimum line items as specified by AASB 101 are correctly presented. (0 -1 marks) The presentation, format, calculations and aggregation/disaggregation of items in the financial statement are not in accordance with AASB 101 guidance. Minimum line items as specified by AASB 101 are not correctly presented.

Write a Review

 

Cost Accounting Questions & Answers

  How many irrs are there

Compute the IRR for this project. How many IRRs are there? Using the IRR decision rule, should the company accept the project? What's going on here?

  Compute the total budgeted cost for each department

Compute the total budgeted cost for each department, assuming actual direct labor hours worked were 53,000 and 47,000, in the Fabricating and Assembling Departments, respectively.

  Compute the cost of chocolate completed

The production supervisor estimates that the ending work in process is 60 percent complete on April 30. Compute the cost of chocolate completed and the cost of the chocolate in work-in-process ending inventory as of April 30.

  1 the cpa invested 200000 cash into his new firm in

1. the cpa invested 200000 cash into his new firm in exchange for 200000 shares of capital stock at 1.00 per share.2.

  Critically discuss major ethical issues raised by awb

Critically discuss the major ethical issues raised by the AWB scandal. You are required to make references to the unit materials and need to do scholar research to support your discussion.

  How much must the old machine fetch upon resale

How much, at a minimum, must the ‘‘old'' machine fetch upon resale at this time to make purchasing the new machine worthwhile?

  Discuss ethical dilemma larry faces and what is the issue

Discuss the ethical dilemma Larry faces: What is the issue? Who are the parties infected? What factors should Larry consider in making his decision?

  What do you learn about the company hp inc

What do you learn about the company? What areas are changing and may be opportunities for cost control and improved profits?

  What amount should be charged to 2010 for factory overhead

If the machine hour method is used in applying factory overhead and the predetermined rate is $12.50 an hour, what amount should be charged to 2010 for factory overhead?

  The initial research proposal will consist of the following

the initial research proposal will consist of the following items1. identify a business research topic2. define the

  Determine the equivalent annual cost of all operating costs

Determine the equivalent annual cost of all operating costs, for a life of 25 years and current worth of all operating costs, for a life of 25 years.

  Plans for sharing income and loss

The partners expect the business to perform as follows: year 1, $18,000 net loss; year 2, $45,000 net income; and year 3, $75,000 net income.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd