Statement of Financial Position

Statement of Financial Position

Statement of Financial Position Sydney Company Limited provided the following Trial Balance in regard to its operation for the year ended 30 June 2016

 20152016
 Debit CreditDebit Credit
$$$$
Cash at bank64,308197,332
Call on deposit60,00060,000
Petty cash5,0005,000
Advertising prepaid1,9602,130
Account receivable69,83561,303
Inventory41,90752,867
Land and building190,000190,000
Motor Vehicle61,00086,000
Accumulated depreciation- Building8,50015,700
Accumulated depreciation12,40025,900
Goodwill on acquisition80,00080,000
Accumulated impairment loss- Goodwill8,000
Account payable47,87945,361
Provision long service leave18,00023,000
Taxation payable27,08061,416
Wages accrued1,0361,248
Rental income in Advance600800
Dividend payable15,00012,000
Mortgage30,00020,000
Share capital350,000360,000
Retained earnings26,16836,515
Sales750,000847,124
Cost of goods sold475,000477,502
Rental income received12,00017,000
Wages125,000127,308
Superannuation4,7535,092
Long service leave4,0005,000
Advertising8,5009,600
General expenses24,00022,305
Impairment of Goodwill8,0008,000
Depreciation- Building6,2007,200
Depreciation- Motor Vehicle12,50013,500
Interest expenses1,5001,700
Bad debt200809
Income tax55,00061,416
Total 1,298,6631,298,6631,474,0641,474,064

Statement of Financial Position

Additional information for the June end 2016

  1. All sales and purchase are in credit.
  2. All the expenses except depreciation, impairment and bad debts is cash expenses.
  3. Company is maintaining tax as per tax payable method.
  4. Dividend payable of 2015 is paid.
  5. Company paid interim dividend $15,000.
  6. The company has book value of land and building $190,000 and revaluation was done by company where valuator revalue same assets worth $185,000.
  7. 10% of retained earning transferred to General Reserve.
  8. Company issued share capital $10,000 at June end 2016.
  9. Company transferred its assets revaluation loss to retained earnings.

Statement of Financial Position

  1. Comprehensive Income Statement
  2. Statement of Change in Equity
  3. Statement of Financial Position
  4. Cash Flow Statement 

The Sydney Company Limited

Comprehensive Income Statement

For the year ended 30 June 2016 

Particulars Note$
Sales Revenue847,124
Cost of Sales(477,502)
Gross Profit  369,662
Other Income117,000
Employees benefit2(137,400)
Administrative expenses3(32,714)
Depreciation4(20,700)
Impairment of goodwill(8000)
Finance cost5(1,700)
Profit before income tax  186,108
Income tax expenses(61,416)
Operating profit after tax 124,692
Gain/(losses) recognized(5,000)
Total change in equity during the period6119,692

 Note 1: Rental

Note 2: Consist of Wages, Superannuation and Long Service Leave $127,308, $5,092 and $5,000 respectively.

Note 3: Consist of Advertising, general expenses and bad debts $9,600, $22,305 and $809 respectively.

Note 4: Building and Motor vehicle $7,200 and $13,500 respectively.

Note 5: Interest expenses

Note 6: Revaluation of building decreased. 

The Sydney Company Limited

Statement of Change in Equity

For the year 30 June 2016 

 Retaining Earnings Capital Assets Revaluation Reserve General Reserve Total
Opening Balance 63,515350,00000413,515
Add: Profit for the period124,692124,692
Gain/(Loss0 recognized directly in equity(a)(5000)(5,000)
Dividend Paid/Declared(27,000)(27,000)
Transferred to General Reserve(1,247)1,247
Issue of Share capital (b)10,00010,000
ARR transferred to R/E(5,000)5,000
Closing Balance 154,960360,0001,247516,207

 You have to adjust the value of revaluation of Land and Building in your final Statement of Financial Position. At this time, the value is $190,000 but when you prepare the final balance sheet, then you have to decreased this value to $185,000. But before to adjust, you have to also check the opening and closing value of Land and Building. Sometime, your accountant can give you the adjusted Land and Building value where opening and closing value may not be same.

  • Additional share issue also has same impact. You have to increase the share capital by $10,000 in your final statement of financial position. For this you have to also check the opening and closing balance. If the closing value is more than opening value by $10,000 then you don’t need to adjust.

The Sydney Company Limited

Statement of Financial Position 

Note2016
Assets   
Current Assets   
Cash and Cash Equivalent1262,332
Trade and Other Receivable61,303
Inventories52,867
Other Current Assets22,130
Total Current Assets  378,632
Non-current Assets   
Land and Building3185,000
Less: Accumulated Depreciation(15,700)
Motor Vehicle86,000
Less: Accumulated Depreciation(25,900)
Goodwill80,000
Less: Accumulated impairment(8,000)
Total Non-current Assets  301,400
Total Assets  680,032
Liabilities   
Current Liabilities   
Trade Payable45,361
Other Payable425,048
Taxation payable61,416
Dividend payable12,000
Total Current Liabilities  143,825
Non-Current Liabilities   
Mortgage20,000
Total Non-Current Liabilities  20,000
Total Liabilities  163,825
Net Assets  516,207
Equity 5 
Share Capital360,000
Retained Earnings154,960
General Reserve1,247
Total Equity  516,207

Note 1: Cash, call deposit and petty cash are included.

Note 2: All prepaid expenses are included.

Note 3. The revaluation value is reported.

Note 4: Provision for long service leave, wages accrued and rental income in advance are included.

Note 5: From Statement of changes in equity 

The Sydney Company Limited

Cash Flow Statement

For the year ended 30 June 2016

$$
Cash flow from operating activities   
Cash receipt from customer854,847
Rental income17,200
Cash paid to creditors(490,980)
Wages(127,096)
Superannuation(5,092)
General expenses(22,305)
Advertising(9,770)
Tax expenses(27,080)
Interest expenses(1,700)
Net cash from Operating Activities  188,024
Purchase of Motor Vehicle(25,000)
Net cash used in Investment Activities  (25,000)
Cash flow from Financing Activities   
Proceed from Issue of Share Capital10,000
Payment of Mortgage(10,000)
Dividend payment(30,000)
Net cash used in Financing Activities  (30,000)
Net increase/(decrease) in cash and cash equivalents  133,024
Cash and cash equivalents at beginning of period64,308
Cash and cash equivalents at end of period197,332

Cash and cash equivalents at end of period should be equal with the balance of statement of financial position. You can check with your question.

Maddox Smith

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