ACC2CRE Corporate Reporting

Answer:

Part 1: Adjustment Entries

Adjustment Entries as on 30 June 2017
In the books of Roxy Limited
Amount in AUD $
Sr. No. Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	Date	Particulars	Debit	Credit
1	30-Jun	Depreciation Expenses
		To Accumulated Depreciation-Buildings	$ 2,000,000.00
		([email protected]%)		$ 2,000,000.00
2	30-Jun	Depreciation Expenses	$ 250,000.00
		To Accumulated Depreciation-Vehicles		$ 250,000.00
		([email protected]%)
3	30-Jun	Profit and Loss account	$ 2,250,000.00
		To Depreciation Expenses		$ 2,250,000.00
4	30-Jun	Profit and Loss account	$ 160,000.00
		To allowance for doubtful debts		$ 160,000.00
5	30-Jun	Salaries: Travellers	$ 100,000.00
		To Salaries: Travellers Payable		$ 100,000.00
6	30-Jun	Prepaid general expenses	$ 15,000.00
		To General Expenses		$ 15,000.00
7	30-Jun	Profit and loss account	$ 3,504,000.00
		To Provision for Income Tax		$ 3,504,000.00
8	30-Jun	Dividends	$ 2,500,000.00
		To Dividends payable		$ 2,500,000.00
9	30-Jun	Profit and loss Appropriation account	$ 1,000,000.00
		To General Reserve		$ 1,000,000.00
10	30-Jun	Land	$ 800,000.00
		To Revaluation Surplus		$ 800,000.00
		(11000000-10200000)
11	30-Jun	Profit and Loss Account	$ 17,000.00
		To Provision for expenses for legal suits		$ 17,000.00
12	30-Jun	Provision for Income Tax	$ 1,974,900.00
		To Income Tax Payable		$ 1,974,900.00
		Total	$ 14,570,900.00	$ 14,570,900.00

Part 2: Financial Statements

Statement of Comprehensive Income
of Roxy Limited
for the period ending on 30 June 2017
Amount in AUD $
Particulars	Amount	Amount
Sales revenue		$ 24,000,000.00
Less: Cost of Sales		$ 11,000,000.00
Gross Profit		$ 13,000,000.00
Add: Other Incomes
Interest on investments	$ 1,000,000.00
Rent revenue	$ 750,000.00	$ 1,750,000.00
Profit Before operating expenses		$ 14,750,000.00
Less: Operating Expenses
Selling Commission expense	$ 100,000.00
Delivery expense	$ 200,000.00
Salaries: Travelers	$ 550,000.00
Salaries: Administration	$ 2,000,000.00
Directors fees	$ 200,000.00
Depreciation	$ 2,250,000.00
Allowance for doubtful debts	$ 160,000.00
Audit fees	$ 90,000.00
Interest on mortgage	$ 1,000,000.00
Provision for expenses for legal suits	$ 17,000.00
Provision for Income tax	$ 3,504,000.00
Damage due to fire	$ 150,000.00
General expenses	$ 1,450,000.00	$ 11,671,000.00
Net Profit		$ 3,079,000.00

Calculation of Income Tax Payable
Particulars	Amount
Net Profit Before income tax paid	$ 3,079,000.00
Add: Provision for income tax	$ 3,504,000.00
Net Profit amount for income tax calculation	$ 6,583,000.00
Income Tax @30%	$ 1,974,900.00
Net Profit After Tax	$ 4,608,100.00

Statement of Change in Equity
of Roxy Limited
for the period ending on 30 June 2017
Amount in AUD $
Share Capital
Opening Balance	$ 67,000,000.00
Add: Any issue	$ –
Closing Balance	$ 67,000,000.00
Retained Earnings
Opening Balance	$ 6,600,000.00
Less: Final Dividend Previous year	$ -2,500,000.00
Less: Interim Dividend	$ -1,500,000.00
Add: Profit of the year	$ 3,079,000.00
Less: Transfer to general reserve	$ -1,000,000.00
Closing Balance	$ 4,679,000.00

Statement of Financial Position
of Roxy Limited
as at 30 June 2017
Amount in AUD $
Particulars	Amount	Amount
Assets
Current Assets
Cash at Bank	$ 1,000,000.00
Accounts receivables	$ 4,495,000.00
Less: Allowance to Doubtful Debt	$ -160,000.00
Prepaid general expenses	$ 15,000.00
Inventory	$ 21,500,000.00
Total Current Assets		$ 26,850,000.00
Non Current assets
Land	$ 11,000,000.00
Buildings	$ 40,000,000.00
Less: Accumulated depreciation- buildings	$ -6,000,000.00
Vehicle	$ 2,500,000.00
Less: Accumulated depreciation- vehicles	$ -750,000.00
Investments	$ 35,000,000.00
Total Non Current Assets		$ 81,750,000.00
Total Assets		$ 108,600,000.00
Liabilities
Current Liabilities
Bank overdraft	$ 7,500,000.00
Salaries: Travellers Payable	$ 100,000.00
Provision for Income Tax	$ 1,529,100.00
Provision for expenses for legal suits	$ 17,000.00
Accounts payable	$ 2,000,000.00
Income tax payable	$ 1,974,900.00
Total Current Liabilities		$ 13,121,000.00
Non Current Liabilities
Mortgage payable on land and buildings		$ 20,000,000.00
Shareholder’s Fund
Share capital	$ 67,000,000.00
Calls in advance	$ 2,000,000.00
Retained earnings (incl. Net Income)	$ 4,679,000.00
General Reserve	$ 1,000,000.00
Revaluation Surplus	$ 800,000.00
Total Shareholder’s Fund		$ 75,479,000.00
Total Liabilities and Shareholder’s fund		$ 108,600,000.00

Part C: Notes to Financial Statements

The financial statements have been prepared in accordance with the AASB 101 standards and all the reporting requirements provided in the other accounting standards.
The measurement basis used for preparation of the financial accounts is historical cost basis (Accounting Standards, 2017).
The above financial statements are being approved by the board of directors of the company in the annual general meeting.
Fixed assets or non current assets of the company are presented in the balance sheet at cost less accumulated depreciation. It is presented as per AASB 116 (Accounting Standards, 2017).
Depreciation has been charged at the rate of 10% p.a. and on buildings at the rate of 5% p.a. for the whole year. It can be seen in below table.

Particulars	Building	Vehicle
Cost of Asset	$ 40,000,000.00	$ 2,500,000.00
Depreciation of Current Year	$ 2,000,000.00	$ 250,000.00
Depreciation Rate	5%	10%

Particulars	Building	Vehicle
Accumulated Depreciation at starting of year	$ 4,000,000.00	$ 500,000.00
Depreciation of Current year	$ 2,000,000.00	$ 250,000.00
Accumulated Depreciation at end of year	$ 6,000,000.00	$ 750,000.00

Accounts Receivables and any prepayments under current assets are recorded at fair value less any provision for doubtful debt.

Any contingent liabilities that are due in the future years have been successfully analyzed and proper accounting treatment has been done as per AASB 137 (Accounting Standards, 2017).

Land has been over-valued at its fair value. Fair value is measured at per provisions defined in AASB 116: Property, Plant and Equipment. Fair value is measured according to the market value of the land.

Provisions, Contingent Liabilities and Contingent Assets. There was legal suit for $17,000 on the company due to breach of contact (Notes to Accounts (Sample), n.d.).

Income Taxes are measured according to AASB 112 (Accounting Standards, 2017). Income tax is calculated on the profit left after deducting all the expenses relate to cost of sales, operating expenses and selling expenses. Income tax rate applied on the company is 30%.

There has been change in the income tax rate by the commonwealth government from 39% to 42% from the July 1, 2017. So, income tax returns that will be submitted after 1 July, 2017 will be charged at rate of 42%.

Company has authorized and subscribed share capital of 67,000,000 ordinary shares at price of $1.

Company has declared the final dividend of $2,500,000 for the current year. Interim dividend declared and paid from the previous retained earnings is equal to $1,500,000 (Notes to Accounts (Sample), n.d.).

Director Fees is calculated using the proper standards and laws in this behalf. The director fee paid for the current year was $200,000.

There is transfer to general reserve from the profit appropriation account of $1,000,000.

References

Accounting Standards. 2017. [Online]. Available at: https://www.aasb.gov.au/Pronouncements/Current-standards.aspx [Accessed on: 6 September, 2017].

Notes to Accounts (Sample). n.d. [Online]. Available at: https://www.bm.icac.hk/bm_wcms/UserFiles/File/en/CMS/sample_documents_fm/Notes%20to%20the%20Accounts.pdf [Accessed on: 6 September, 2017].

Turn in your highest-quality paper
Get a qualified writer to help you with

“ ACC2CRE Corporate Reporting ”

Get high-quality paper

NEW! AI matching with writer