NewCat Ltd, a manufacturer and retailer for pet products, commenced operations on 1 July, 2018 by issuing 100 000 $2.00 shares, payable in full on application. There were no share issue costs.
For the year ending 30 June 2019, the company recorded the following aggregate transactions:
|Cost of sales||1 800|
|Selling and distribution expenses||130|
|Employee entitlement expenses — (selling)||95|
|Wages and salaries — (selling)||212|
|Wages and salaries — (admin)||210|
|Doubtful debts expense||120|
|Depreciation expense -to be calculated|
|Other borrowing expense||20|
|Income tax expense||120|
The following additional information was noted during the preparation of financial statements for the year ended 30 June 2019:
- Additional 35 000 $2.00 fully paid shares have been issued and fully paid on 1 March 2019.
- A cash dividend of $10 000 (10 cents per share) was declared and paid during the 2019 financial year and a final dividend for 2019 of $15 000 was proposed but not recognised in the financial statements.
- Inventory was measured at the lower of cost and net realizable value.
- Buildings, plant and equipment were measured at cost. The benefits were expected to be received evenly over the useful life of the asset.
- Land was revalued upward by $20 000 (assume zero income tax for this transaction). The valuation was conducted by the registered valuer, Valuation Easy Pty Ltd
- Financial assets held for trading are equity investments that are held for the purpose of selling and short-term profit taking.
- $200 000 of other loans are repayable within 1 year. The remaining amount is payable in full at the end of 2022.
- The provision for employee benefits includes $22 000 payable within 1 year.
- The warranty provision is in respect of a 12-month warranty given on certain goods sold.
- NewCat Ltd transferred $10 000 out of retained earnings into general reserve.
- The bank loan is for 5 years and repayable in full at the end of the term. The interest rate is 9% and it is secured over the land.
- NewCat Ltd uses the single statement format for the statement of profit or loss and other comprehensive income and classifies expenses by function within the statement.
The following assets were purchased on 1 July 2018:
|Asset||Cost ($)||Useful life (years)|
|Plant and equipment||890 000||5|
|Buildings||1 000 000||20|
Summarised account balances are provided below:
|Year-end balances, 30 June 2019||$|
|Cash on hand||20|
|Cash on deposit, at call||25|
|Allowance for doubtful debts||120|
|Financial assets held for trading||100|
|Plant and equipment||890|
|Amortisation of patent||2|
|Provision for employee benefits||95|
|Current tax payable||95|
|Deferred tax liability||25|
|Land revaluation reserve||20|
- Prepare a statement of comprehensive income for NewCat Ltd in accordance with the requirements of AASB 101. NewCat Ltd uses the single statement format for the statement of profit or loss and other comprehensive income and classifies expenses by function within the statement;
- Prepare a statement of changes in equity for NewCat Ltd in accordance with the requirements of AASB 101;
- Prepare a statement of financial position for NewCat Ltd in accordance with AASB 101. Use the current/non-current presentation format;
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