At the end of the first year (31 December 2014) of operations of the start-up co

Question

At the end of the first year (31 December 2014) of operations of the start-up company Selfies- On-Fire P/L, the following financial data for the company is available: Cash Receivables (all considered collectable) Inventory of merchandise (based on physical count and valued at cost) Equipment owned (at cost) Depreciation claimed for equipment use Accounts payable (creditors) Salary payable for 2014 (on 31 December 2014, this was owed to an S 69,290 24,000 180,000 100,000 10,000 104,740 4,000 emplovee who was away because of an emergency: will return around 10 January 2015, at which time the payment will be made) Total sales revenue Expenses, including the cost of the merchandise sold (excluding income tax) Company income tax expense is calculated at 30% of profit before tax Company income tax already paid during 2014 Contributed capital, 16000 shares outstanding Dividends declared for 2014 Interim dividend payment made during 2014 310,000 208,200 11,250 174,000 20,000 10,000 (a) Prepare a statement of comprehensive income (profit and loss) for the year 2014 (b) Prepare a statement of changes in equity (c) Prepare a statement of financial position (balance sheet) at 31 December 2014

Explanation / Answer

(a)

Note: Expenses are assumed to include depreciation.

(b)

(c)

Selfies-On-Fire P/L Statement of Comprehensive Income (Profit and Loss) For the Year Ended December 31, 2014 Revenue: Sales revenue 310000 Expenses 208200 Net operating income 101800 Income tax expense 40720 Net income 61080

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