Question 2 [15 marks] Preparation of a statement of financial position and statement of profit or…

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Question 2 [15 marks]

Preparation of a statement of financial position and statement of profit or loss and other comprehensive income
The summarised trial balance of Swish Ltd, a clothing retailer, includes the following accounts at 30 June 2016:
DR ($) CR ($)
Sales revenue 3,245,000
Interest revenue 9,000
Rental revenue 73,000
Changes in clothing inventories 25,000
Purchases of clothing inventories 1,020,000
Administrative salaries 168,000
Advertising expense 38,000
Amortisation expense – patent 5,000
Annual leave expense – administrative staff 2,000
Annual leave expense- sales staff 4,000
Depreciation – administration office equipment 8,000
Depreciation – shop fittings 42,000
Depreciation – vehicles 6,000
Delivery costs – freight out 21,000
Doubtful debts expense 63,000
Electricity expense – administration office 4,000
Electricity expense – retail store 17,000
Goodwill impairment loss 20,000
Interest expense 19,000
Long service leave expense – administrative staff 2,000
Long service leave expense – sales staff 10,000
Promotion expenses 26,000
Rent expense – administration office 18,000
Rent expense – retail store 189,000
Sales staff salaries 285,000
Shipping supplies 12,000
Sundry expenses 4,000
Income tax expense 450,000
Gain on revaluation of delivery vehicles ($10,000 less $3,000 tax) 7,000
Cash on hand 17,000
Accounts receivable 545,000
Allowance for doubtful debts 83,000
Inventories 98,000
Prepaid rent – retail store 20,000
Investment property 954,000
Deferred tax assets 23,000
Patent 50,000
Accumulated amortisation – patent 10,000
Trademark – at cost 35,000
Goodwill 50,000
Accumulated impairment losses – goodwill 20,000
Administration office equipment – at cost 46,000
Accumulated depreciation – office equipment 22,000
Shop fittings – at cost 614,000
Accumulated depreciation – sales equipment 96,000
Vehicles – delivery vehicles – at fair value 70,000
Accumulated depreciation – delivery vehicles 3,000
Accounts payable 63,000
Current tax liability 312,000
Bank loan 200,000
Provision for annual leave 37,000
Provision for long service leave 18,000
Deferred tax liabilities 3,000
Share capital – ordinary fully paid shares 500,000
Retained earnings at 1 July 2015 272,000
Asset revaluation surplus 7,000
4,980,000
4,980,000
Additional information:
All assets other than accounts receivable, cash, prepayments and inventories are non-current. All liabilities other than accounts payable, provision balances listed below and current tax liability are non-current.
Provision for annual leave includes $9,000 payable within 1 year.
Provision for long service leave includes $5,000 payable within 1 year.
On 1 January 2016, the vehicles were revalued from $60,000 to $70,000. The gain, which has been included in the trial balance above, is to be recognised in other comprehensive income in accordance with AASB 116 paragraph 39.
Swish Ltd uses the single statement format for the statement of profit or loss and other comprehensive income and presents an analysis of expenses by nature on the statement.
In relation to the statement of financial position, where AASB 101 requires entities to disclose further sub-classifications of the minimum line items on the face of the statement or in the notes, the directors of Swish Ltd want to report only the minimum line items on the face of the statement, and leave the sub-classifications to be disclosed in the notes.
Required:
Prepare the statement of financial position and statement of profit or loss and other comprehensive income of Swish Ltd for the year ended 30 June 2016 in accordance with AASB 101, using the line items that a listed company is likely to use. Show all workings. Notes and comparative figures are not required.

Question 2 Allocated marks
Statement of financial position 6
Statement of profit or loss and other comprehensive income 5
Explanations / workings provided appropriately 2
Presentation 2

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