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The adjusted trial balance of Snake Ltd as at 30 June 201

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The adjusted trial balance of Snake Ltd as at 30 June 2017;The adjusted trial balance of Snake Ltd as at 30 June 2017 is as follows;Debit Credit;$$;Accounts receivable1,350,000;Asset revaluation reserve440,000;Accumulated amortisation ? patents & trademarks25,000;Accumulated impairment loss ? goodwill180,000;Accumulated depreciation -;Plant & machinery206,000;Fixtures & fittings47,000;Buildings40,000;Administrative staff salaries expense540,000;Advertising expense120,000;Bank loan (unsecured ? repayable in annual instalments of $40,000)200,000;Carrying amount of plant and machinery sold24,000;Cost of sales3,424,000;Deposits at call120,000;Dividends revenue43,000;Deferred tax asset210,000;Debentures held in Emerald Ltd (mature on 30/6/2018)214,000;Dividends receivable8,000;Freight inwards90,000;Freight outwards115,000;Ordinary shares, fully paid3,654,000;General reserve680,000;Goodwill732,000;Retained profits ? 1/7/2016750,000;Mortgage loan (secured over land and buildings ? due 30/9/2020) 254,000;Accounts payable472,000;Current tax liabilities156,000;Provision for long service leave (only 40% is currently eligible)250,000;Deferred tax liability175,000;Allowance for doubtful debts77,000;Provision for annual leave62,000;Freehold land (at fair value)1,276,000;Buildings (at fair value)900,000;Listed investments ? at fair value100,000;Loan to Charlie Ltd (due on 30/6/2020)220,000;Patents and trademarks125,000;Plant & machinery - at cost684,000;Preference shares, fully paid240,000;Prepayments40,000;Inventories1,950,000;Income tax expense381,000;Final dividend payable200,000;Fixtures & fittings - at cost118,000;Cash at bank530,000;Sales revenue6,600,000;Sundry revenue46,200;Sales returns and allowances12,000;Sales staff salaries and commission expense500,000;7% debentures ? due 30/4/2018 (secured over inventories)85,000;Proceeds on sale of plant and machinery40,000;Other administrative expense370,000;Other selling expense210,000;Other expenses (included interest expense of $68,000)190,000;Underwriting commission and other share issue costs47,000;Interest revenue50,000;Interest payable9,000;Transfer to general reserve50,000;Interim dividend paid - ord131,200;Final dividend declared ? ord164,000;Final dividend declared - pref36,000-;14,981,20014,981,200;Additional information;i)Included in other administrative expense were;fees paid to auditor (25% for audit & reWhite;of financial reports & 75% for non-audit;consulting services)$60,000;fees paid to related practice of the auditor (for;legal services)$12,000;ii)Inventories, $1,950,000, comprised of;Raw material ? at cost$70,000;Work in progress ? at cost800,000;Finished goods ? at cost1,054,000;Finished goods ? at net realisable value26,000;Finished goods are valued at the lower of cost and net realisable value on a weighted average basis.;iii)Contributed equity as at 1 July 2016 consisted of;2,000,000 ordinary shares issued at $1 each, fully paid$ 2,000,000;100,000 15 % preference shares issued at $2.40 each, fully paid240,000;45,000 share options22,500;iv)On 14 July 2016, a rights issue of 1,280,000 ordinary shares were madeat $1.25 each. The underwriting commission and other shares issue costs forthe issue amounted to $15,000. The shares issued ranked equally with existing shares for dividend.;v)On 29 May 2017, the 45,000 share options were exercised and 45,000 ordinary shares were allotted at an exercise price of 70 cents each. The allotted shares did not rank for dividend until 2018.;vi)On 17 June 2017, freehold land was revalued to its fair value of $1,276,000 from its carrying amount of $1,076,000. The related deferred tax has been accounted.;vii)On 28 June 2017, Snake entered into a contract with Magnet Ltd for the construction of three new machines at a cost of $245,000 each. The company expects to take delivery of the first machine in January 2018, and the rest in February 2016.;viii)On 30 June 2017, listed investments were revalued to their fair value. They were purchased at a cost of $60,000 in May 2016 and are classified as investments in equity instruments. The related deferred tax liability had been accounted.;Note:Loan receivables and held-to-maturity investments (such as debentures held in another entity) are to be classified as other financial assets.;ix)An amount of $50,000 was transferred to general reserve from retained earnings.;x)Accounting policies adopted are consistent with those of the previous year.;xi)Tax rate is 30%;Required;Prepare a statement of profit or loss and other comprehensive income for Snake Ltd for the year ended 30 June 2017 according to the requirements of AASB 101 (classify expenses by functions). Show all workings.;(Note: You will get zero mark if you prepare an internal statement ? see demonstration problems 1 & 2 on pages 648 ? 658.);Prepare a statement of financial position for Snake Ltd at 30 June 2017 to comply with AASB 101. Use the current and non-current presentation format. Show all workings.;(Note: You will get zero mark if you prepare an internal statement ? see demonstration problems 1 & 2 on pages 648 ? 658.);Prepare a statement of changes in equity for Snake Ltd for the year ended 30 June 2017 according to the requirements of AASB 101. Show the dividends per share on the statement. Show all workings.;Prepare appropriate notes to the following items;1)summary of significant accounting policies ? an extract of the basis of accounting and inventories;2)inventories;3)long-term borrowings;4)auditor?s remuneration;5)commitments.

 

Paper#28758 | Written in 18-Jul-2015

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