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1. Statement of profit or loss and other comprehensive income:

 

Statement of profit and loss

Particulars

 

$ '000

Income

 

 

Sale Revenue

 

82,631

   Service revenue

 

32,305

   Other income

 

484

Total revenue

 

1,15,420

 

 

 

Capital income: Gain on sale of land

 

6,298

 

 

 

Total income

 

1,21,718

 

 

 

Expenses

 

 

   Cost of Goods Sold

 

53,210

General operating costs

 

11,611

Salaries and wages

 

21,524

Insurance expenses

 

490

Advertising and marketing expenses

 

2,460

Retirement gift for employee

 

0.82

Expense for annual leave

 

1,698

Finance costs

 

361

Annual leave expenses

 

1,698

Warranty expenses

 

1,789

Provision for doubtful expenses

 

980

Audit and consultancy fees

 

950

Depreciation and amortisation

 

5,708

Extraordinary expense:

 

 

                          Survey expenses

 

420

                          Extensive training

 

225

                          App Development Expenses

 

250

Other Expenses

 

5043.18

 

 

 

 

 

1,08,418

 

 

 

Capital expenses :Loss on sale of Shop Fittings

 

166

 

 

 

Total expenses

 

1,08,584

 

 

 

Net Profit Before tax

 

13,134

Less: Tax @ 30%

 

3940

Profit After Tax

 

9,194

Other comprehensive income

 

-

Total comprehensive income for the year

 

9,194

 

2. Statement of financial position:

 

Balance sheet as at 30 June 2018

Particulars

 

$’000

Assets

 

 

Financial assets

 

 

Cash and deposits

 

851

Receivables

 

11,320

Total financial assets

 

12,171

Non-financial assets

 

 

Inventories

 

3,640

Property, plant and equipment

 

24,834

Prepayments

 

1,020

Total non-financial assets

 

29,494

 

 

 

Total assets

 

41,665

 

 

 

Liabilities

 

 

Payables

 

2,490

Accrued Expenses

 

785

Unearned Income

 

2,786

Dividend Payable

 

525

Provisions

 

 

For annual leave

 

697

For Warranties

 

1,011

For new apps

 

250

Total liabilities

 

8,544

Net assets

 

 

Equity

 

 

Accumulated surplus

 

 

Share Capital

 

13088

Retained Earning

 

20,033

Contributed capital

 

 

Net worth

 

33,121

 

 

 

Total Equity and Liabilities

 

41665

 

3. Statement of changes in equity

 

Statement of changes in equity for the year ended 30 June 2018

Particular

Ordinary share capital

General reserve

Retained earnings

Total

Opening Balance as on 1 July 2017

12750

200

10399

23349

Net Profit after tax

-

-

9194

9194

Dividend Payable

-

-

-525

-525

Transfer to general reserve

-

3300

-3300

0

Bonus issued

338

-338

-

0

Share issue expenses

-

112

-

112

Total

13088

3274

15768

32130

4.Notes to the financial statements:

Explanation related to the financial statements of this company shall be included in the notes, which are as follows:

  • Property,plant and equipment of company as shown in the balance sheet include the land, building and furniture and fittings of the company in accordance with AASB 116 Property, Plant And Equipment (Dean and Clarke, 2005).
  • With the context of AASB 102 Inventories, Inventory costing $2,100,000 had been delivered to company on 29 June 2018,  But due to staff shortages at this time, the details of this transaction/event were not processed until 14 July 2018 and hence this has not been accounted for in the trial balance. This inventory had been ordered on 1 June 2018 and an amount of $600,000 was paid in advance to secure the order. The amount remaining was required to be paid within 2 weeks of date of delivery of the inventory and was paid by the company on 10 July 2018.
  • In this, company has tax rate is 30%. Tax expense is based on 30% of the accounting profit before tax as per AASB 112.
  • Other expenses give in income statement comprises total of various expenses shown as other expenses in accordance with formate given in AASB 101.
  • Income of company is comes from various sources which includes sales revenue and service revenue and other income.

5.Directors declaration

In this section directors declare that organisation is using appropriate accounting principles and regulations while formulating financial reports. They also declare that the company is able to pay all its debts, dues amount and payables. Information of possible future gains and incomes can also be analysed with the help of this declaration (Haswell and Langfield‐Smith, 2008). External stakeholders of a business entity may get insider data of enterprise and then make decision of making investment or not. Main purpose of this testimony is to declare that their entity is disclosing appropriate data. It is signed by all the directors and it is made on a specific date when annual report is generated. It is very beneficial for the stakeholders to resolve their queries about organisation's performance.

In the opinion of the directors Organisation have followed all the accounting principles and standards including Section 296 and 297. It assures that all the legal requirements are fulfilled by the company and it is also presenting fair and true view of organisation's financial statements. It has resulted in total income of 121718 and net profits of 230302. The declaration is being made on 21 September 2018 which is signed by the directors by mutual concern. “The Company” is a reporting entity which is disclosing all relevant and necessary information in the financial statements that may guide stakeholders to make strategic decisions. It is having assets of 258833, liabilities of 8019, capital of 13088 and retained earnings of 237726.

All the information is presented in the final accounts are relevant, accurate, appropriate and reliable in the opinion of directors.

6. Annual directors report

All the information of dividend to the share holders, interest to debtors etc. are recorded in this report. It also includes other information such as salaries to the top executives and declared payment to the members of the organisation. It is not necessary that the payments are made they can be proposed in the financial year. It also includes the name of directors of the company and the appropriate information of that the organisation is registered or not. Information of that period for which individuals worked as executives is also covered in this report. Detailed information of them is not required to be included in it as it is not necessary.

In “The Company” on directors have declared a dividend on 7% on each share on 30 June 2018. It will be distributed from retained earnings of the organisation. They have also decided to transfer 3300000 from preserved incomes to general reserves so that it n ca be used for operational activities of the organisation. A declaration regarding interim dividend is also made by the organisation in which it is proposed that one bonus share of 3 dollar each is going to be issued to the shareholders on 50 shares. All of them are going to be issues from general reserve of the organisation. This decision is made by them on 15 January 2018.

A major change was made in the equities as directors planned to transfer 3300000 to the general reserve which is going to be deducted from retained earning. As it is a part of internal funds hence it will be considered as change in equity. The organisation have ignored the tax effect accounting and no expenses related to it, are recorded in the books. Directors have planned to enhance shareholder's investment by offering them bonus shares so that they can invest more money. It will be beneficial for the better execution of business activities.

A customer was injured in the renovation process of the company on 1 May 2018 and the lawyer advised that the company was being sued for this case (Bradbury, 2008). A unplanned expenses of 1200000 has also faced by the organisation during the year. The renovation of retail store is planned to expand and develop the business. Total equities at end of the year were 13088 and retained earnings were of 237726.

All the above described information is accurate in the opinion of the directors of “The Company”. It can help the stakeholders to determine possible returns that can be acquired by them in future on their investments by assessing current year's rates. The recorded data is accurate and this report will be added to the annual report of the company.

7. Annual auditors report

This report is generated by the auditors of the company in which their opinion about organisation's actual performance and position is recorded. It helps the internal and external stakeholders to determine that organisation is performing well or not. Information regarding materiality is also covered in this report in which it is mentioned that any important data is kept hidden by the enterprise or not. Auditors create a report and present it to the directors so that they can analyse it and assess whether any fraud or error is made by managers, employees or accountants of the company in the report. If there is any mistake is made in the financial statements the strict action can be taken on huge misconceptions and little one are resolved by correcting them.

Auditors declare that accountants of the company have followed appropriate accounting standards and principles. This report help the external stakeholders to determine that a true and fair view of final accounts is presented by the entity or not. It is also advantageous for internal stakeholders such as managers, top management and executives as it can guide them to analyse that accurate and appropriate data is recorded by the employees in the books of accounting or not.

The auditors have analysed the financial reports of “The Company” and analysed that organisation is following section 296 and 297. All the information which is recorded by accountants and employees of the company were appropriate and accurate. In the opinion of them as the business entity is generating profits of 230302 dollar which is higher amount hence financial position of the enterprise if very good (Coombs and et. al., 2013). It is providing good benefits to the share holders including bonus shares and dividends.

Total revenues of the company were 115420 and other gains were resulting in higher profitability. No materiality information is figured out by auditors in the financial statements of “The Company”. Correctness and adequacy level of the discloser level of the final accounts is very high.

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REFERENCES

  • Dean, G. and Clarke, F., 2005. ‘True and Fair’and ‘Fair Value’—Accounting and Legal Will‐o’‐the‐Wisps. Abacus, 41(2), pp.i-viii
  • Haswell, S. and Langfield‐Smith, I., 2008. Fifty‐Seven Serious Defects in ‘Australian’IFRS. Australian Accounting Review. 18(1). pp.46-62
  • Bradbury, M.E., 2008. Fifty‐seven Curious Defects in Haswell and Langfield‐Smith (2008): A Comment. Australian Accounting Review. 18(4). pp.287-293.
  • Coombs, G.W. and et. al., 2013. Australian group on antimicrobial resistance hospital-onset Staphylococcus aureus surveillance programme annual report, 2011. Communicable diseases intelligence quarterly report. 37(3). pp.E210-E218

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