KLZR Ltd Trial Balance And Financial Statements For The Year Ended 30 June 2018

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Statement of profit and loss and other comprehensive income for the year ended 30 June, 2018
		For the year ended 30 June, 2018
Sales		$ 997,000 Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper
Less: Cost of sales		$ (355,000)
Gross Profit		$ 642,000
Add; Non-operating income
Interest revenue	$ 3,000
Dividend revenue	$ 7,000
Bad debt recovered	$ 26,000	$ 36,000
Less: Selling & Distribution expenses
Depreciation – motor vehicles	$ 25,000
Depreciation – plant and equipment	$ 36,000
Salaries	$ 60,000
Selling expenses	$ 97,000	$ 218,000
Less: Administration expenses
Depreciation – motor vehicles	$ 20,000
Depreciation – plant and equipment	$ 10,000
Rental expense	$ 15,000
Salaries	$ 44,000
Loss on destruction of building	$ 42,000	$ 131,000
Less: Finance costs
Doubtful debts expense	$ 8,000
Interest expense	$ 32,000	$ 40,000
Less: Other Operating expenses
Office expense	$ 92,000
Impairment loss – goodwill	$ 5,000
Payment to auditors
in the capacity of auditors	$ 20,000
in the capacity of consultants	$ 16,000	$ 133,000
Profit before tax		$ 156,000
Less: Income tax expense		$ 61,000
Profit for the year		$ 95,000
Other comprehensive income
Gain on revaluation	$ 20,000
Tax on above	$ (6,000)	$ 14,000
Total other comprehensive income		$ 14,000
Total comprehensive income for the year		$ 109,000

KLZR Ltd.
Statement of changes in equity for the year ended on 30 June, 2018
Particulars	Amount
Paid up capital
Balance as at 1 July, 2017	$ 400,000
Add: changes during the year	$ –
Balance as at June 30, 2018	$ 400,000
Retained Earnings
Balance as at 1 July, 2017	$ 225,000
Add: Profit for the year	$ 95,000
Less: Transfer to general reserve	$ (25,000)
Less: Dividends declared	$ (65,000)
Balance as at June 30, 2018	$ 230,000
General Reserve
Balance as at 1 July, 2017	$ 15,000
Add: Transfer from retained earnings	$ 25,000
Balance as at June 30, 2018	$ 40,000
Revaluation Reserve
Balance as at 1 July, 2017	$ –
Add: Fair valuation gain credited in OCI	$ 14,000
Balance as at June 30, 2018	$ 14,000
Total Equity	$ 684,000

Part-(a)

Events	Adjusting or non-adjusting	Justification
1	Non-Adjusting event	As per AASB 110, the adjusting events are those events whose evidence of occurrence are available on the reporting date. As no evidence was available on the reporting date, hence it is a non-adjusting event.
2	Adjusting event	As per AASB 110, the adjusting events are those events whose evidence of occurrence are available on the reporting date. As events were available on the reporting date, hence it is an adjusting event.
3	Non-Adjusting event	As circumstances or evidences for decline in exchange rate were not available on the reporting date, hence it is a non-adjusting event and no adjustment is required.
4	Adjusting event	As on balance date, it is very well known that depreciation is under charged, hence evidence of less depreciation was available, so it is said that it is an adjusting event.

Part-(b)

Events	Journal Entries	Note Disclosures
1	NA	As per para 21 of AASB 110, the disclosure is as under, “The value of company’s investment has gone done by $50,000 due to sudden fall in the share market.”
2	Doubtful debts Dr. $400,000 To Accounts receivable $400,000 (To record receivable written off)	NA
3	NA	As per para 21 of AASB 110, the disclosure is as under, “The value of company’s USD loan liability has increased by $10,105 due to sudden fall in the share market, resulting in a loss of $10,105.”
4	Depreciation expense Dr. $350,000 To Accumulated Depreciation $350,000 (To record depreciation)	NA

Solution-3

Journal entries in the books of Tara Ltd.
Date	Description	Amount
30-Sep-17	Bank A/c	$ 15,600,000
	Share Application A/c	$ (15,600,000)
	(To record receipt of share application money recorded)
10-Oct-17	Share Application A/c	$ 15,600,000
	Share Capital A/c	$ (15,000,000)
	Bank A/c	$ (600,000)
	(To record allotment of shares and refund of excess money)
10-Oct-17	Share Allotment A/c	$ 10,000,000
	Share Capital A/c	$ (10,000,000)
	(To due share allotment due)
10-Nov-17	Bank A/c	$ 10,000,000
	Share Allotment A/c	$ (10,000,000)
	(To record receipt of share allotment money)
1-Feb-18	Share Call Money A/c	$ 5,000,000
	Share Capital A/c	$ (5,000,000)
	(To due share call money)
28-Feb-18	Bank A/c	$ 4,900,000
	Share Call Money A/c	$ (4,900,000)
	(To record receipt of share call money on 4,900,000 shares)
14-Mar-18	Share Capital A/c	$ 600,000
	Share Call Money A/c	$ (100,000)
	Share Forfeiture A/c	$ (500,000)
	(To record forfeiture of 100,000 shares forfeited due non-payment of call money)
14-Mar-18	Bank A/c	$ 530,000
	Share Forfeiture A/c	$ 70,000
	Share Capital A/c	$ (600,000)
	(To record reissued of forfeited shares)

Journal entries in the books of Companion Ltd.
Date	Description	Amount
1-Jul-16	Machinery A/c	$ 190,000
	Bank A/c	$ (190,000)
	(To record purchase of machinery)
30-Jun-17	Depreciation – Machinery A/c	$ 30,000
	Accumulated Depreciation – Machinery A/c	$ (30,000)
	(To record depreciation for the year ((190,000-10,000)/6))
30-Jun-17	Accumulated Depreciation – Machinery A/c	$ 30,000
	Revaluation Loss A/c	$ 10,000
	Machinery A/c	$ (40,000)
	(To record revaluation of machinery)
30-Jun-18	Depreciation – Machinery A/c	$ 28,800
	Accumulated Depreciation – Machinery A/c	$ (28,800)
	(To record depreciation for the year((150,000-6,000)/5))
30-Jun-18	Accumulated Depreciation – Machinery A/c	$ 28,800
	Revaluation Surplus A/c	$ (18,800)
	Machinery A/c	$ (10,000)
	(To record revaluation of machinery)