Question 1 Sunshine Ltd (Sunshine\") is in the business of designing, manufactur

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Question 1 Sunshine Ltd (Sunshine") is in the business of designing, manufacturing and supplying various types of glass products for decoration, architecture and residence uses. accountant, is responsible for preparing the financial statements using the financial informati Diana Lo, the below. Trial balance at 31 December 20X2 Credit $000 8,200 Debit Lease liability (note 3) Leased machinery (note 3) Plant and equipment - at cost $000 11,000 402,500 83,720 44,650 Accumulated depreciation - 1 January 20X2 Inventory -31 December 20X2 Trade receivables Trade payables Bank Ordinary share capital (note 1) 79,800 82,800 56,000 250,000 42,408 250,000 4 Retained profits at 1 January 20X2 debentures (note 2) Current tax (note 7) Deferred tax (note 7) Revenue Provision for warranty cost (note 8) Interest income Cost of sales Selling and distribution costs General and administrative costs Debenture interest paid Fixed bank deposit Dividends paid 3,900 5,800 567,800 3,620 1,920 396,500 76,900 73,600 5,000 150,000 18,278 1,357,198 1,357,198 The following notes are also relevant: The total number of ordinary shares outstanding at 31 December 20X1 is 15,500,000 shares. Sunshine issued 2,500,000 new shares at market price of $2.8 per share on 1 June 20X2 followed by a bonus issues of two 2 new shares for every 9 shares on 31 December 20X2. 1.

Explanation / Answer

SUNSHINE LTD Statement of Profit or Loss and other comprehensive income For the year ended 31 December, 20X2 A Revenue $567,800 B Cost of Sales $396,500 C=A-B Gross Profit $171,300 Operating Expenses: D Selling and distribution cost $76,900 E General and administrative cost $73,600 F=D+E Total operating expenses $150,500 G=C-F Earning Before interest $20,800 Net Interest expenses: H Interest Income ($1,920) I Interest Expenses $5,000 J=H+I Net Interest expenses: $3,080 K=G-J Operating Income before tax $17,720 L Tax expenses $3,900 M=K-L Net Operating Income $13,820 SUNSHINE LTD Statement of Changes in Equity For the year ended 31 December, 20X2 A Retained Profits at the beginning of the year $42,408 B Dividends paid $18,278 C Net Operating Income $13,820 D=A+C-B Retained Profits at the End of the year $37,950 E Ordinery Share Capital $250,000 F=D+E Shareholders'Equity at the End of the year $287,950 SUNSHINE LTD Statement of Financial Position As at 31 December, 20X2 (Ignoring Notes) ASSETS: A Bank $56,000 B Fixed bank deposit $150,000 C Trade Receivables $79,800 D Inventory $83,720 E=A+B+C+D Total Current Assets $369,520 F Leased Machinery $11,000 G Plant and Equipment-at cost $402,500 H Accumulated depreciation ($144,650) I=F+G+H Total Fixed assets $268,850 J=E+I TOTAL ASSETS $638,370 LIABILITIES: K Trade Payable $82,800 L Deferred tax $5,800 M Provision for warranty $3,620 N Lease Liability $8,200 O Debentures $250,000 P=K+L+M+N+O Total Liabilities $350,420 Q Sshareholders'Equity $287,950 R=P+Q Total Liabilities and Shareholders Equity $638,370

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