on 20 September 2016 by issuing 350 000 $5.00 shares, payable in full on applica
ID: 2336381 • Letter: O
Question
on 20 September 2016 by issuing 350 000 $5.00 shares, payable in full on application on a first-come, first-served basis. By 30 November 2016 the shares were fully subscribed and duly allotted. There were share issue costs of $10 000. No additional shares were issued during the year ending 30 June 2017 For the year ending 30 June 2018, the company recorded the following aggregate Sales Interest income Sundry incone Cost of Sales Employee benefit expenses Depreciation expense 5 120 000 34 000 25 000 2 465 000 856 000 244 000 25 000 2 nExplanation / Answer
Post 4 and 5 seperately.
1 Emerald Ltd - Trial Balance as at 30 June 2018 DR CR Sales 5120000 Interest income 34000 Sundry income 25000 Cost of sales 2465000 Employee benefit expenses 856000 Depreciation expense 244000 Amortisation - franchise 25000 Rental expense 120000 Advertising expense (selling) 147000 Insurance expense 48000 Freight out expense 110000 Doubtful debts expense 16000 Interest expense 36000 Borrowing costs 9000 Other expenses 8000 Income tax expense 320000 Cash on hand 960000 Cash on deposit, at call 82000 Accounts Receivables 665000 Allowance for doubtful debts/ Impairments 24000 Other debtors 27000 Finished goods inventories, 30 June 2018 600000 Work in Progress inventories 30 June 2018 105000 Land 94000 Buildings 230000 Accumulated depreciation – buildings 60000 Plant and equipment 1385000 Accumulated depreciation – plant and equipment 330000 Franchise 140000 Accumulated amortisation of franchise 50000 Goodwill 620000 Bank loans 92000 Other loans 440000 Accounts payable 696000 Provision for employee benefits 116000 Income tax payable 35000 Deferred tax liability 140000 Retained earnings, 30 June 2017 225000 Dividends paid 135000 Cash flow hedge reserve 20000 Share capital 2698000 Totals 9776000 9776000 2 Income statement of Emerald Ltd. Particulars Amount ($) Amount ($) Income: Sales 5,120,000.00 Interest income 34,000.00 Sundry income 25,000.00 (A): Total income 5,179,000.00 Expenditures: Cost of sales 2,465,000.00 Employee benefits expenses 856,000.00 Depreciation expenses 244,000.00 Amortization- franchise 25,000.00 Rental expense 120,000.00 Advertising expenses 147,000.00 Insurance expense 48,000.00 Freight out expense 110,000.00 Doubtful debt expense 16,000.00 Interest expense 36,000.00 Borrowing costs 9,000.00 Other expense 8,000.00 (B): total expenditures 4,084,000.00 Profit before tax (A-B) 1,095,000.00 Less: Income tax expense 320,000.00 Profit after tax 775,000.00 3 Statement of changes in equity of Emerald as on 30th June, 2018. Amount ($) Amount ($) Equity share capital as on 30th June, 2017(350000 shares @5.00 each) 1,750,000.00 Retained earnings as on 30th June, 2017 225,000.00 Equity as on 30th June, 2017 1,975,000.00 Add: 75000 shares issued (75000 shares @4.00 per share) 300,000.00 Profit after tax (As calculated in note 1) 775,000.00 Gain from cash flow hedging 20,000.00 1,095,000.00 3,070,000.00 Less: dividend paid 135,000.00 Final proposed dividend 51,850.00 Employee benefits to be settled within a year 32,000.00 Bank loans repayable within 1 year 25,000.00 Bank loans repayable within 1 year 90,000.00 333,850.00 Equity as on June 30, 2017 2,736,150.00Related Questions
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