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:

 

$’000
Sales 4 265
Cost of sales 1 800
Other income 723
Administration charges 285
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  
Interest expense 160
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
Trade debtors 950
Allowance for doubtful debts 120
Other debtors 50
Inventory 985
Financial assets held for trading 100
Land 50
Buildings 1000
Plant and equipment 890
Patents 55
Amortisation of patent 2
Bank loans 900
Other loans 489
Trade creditors 253
Provision for employee benefits 95
Warranty provision 30
Current tax payable 95
Deferred tax liability 25
Land revaluation reserve 20

 

  1. 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; 
  2. Prepare a statement of changes in equity for NewCat Ltd in accordance with the requirements of AASB 101; 
  3. 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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