CA15 Published Accounts Question The following trial balance has been extracted

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CA15 Published Accounts Question The following trial balance has been extracted from the records of ORANGE Lad at 31 December 2017 Dr Cr 393,000 189,000 375 300 270 2017 Inventory at 1 Januray Distribution costs Administration expenses 360,0001 Land and Buildings-Cost Land and Buildings Acc. depreciation at I January 2017 Plant & equipment: cost Plant & equipment Acc.depreciation at I January Trade receivables and payables Cash at bank 72,000 18,000 225 2017 240 90 Ordinary shares of l each (Authorised 50m shares) Share Premium 70,000 3,000 Dividend paid Loan note (debenture) interest 180 35 Retained earnings 7% loan notes (debentures) (redeemable 2020) 10,000 595,490595,490 The following tems are to be adjusted for in preparing financial statements for publication for the year ended 31 December 2017 (1) Depreciation is to be provided as follows: 296 Buildings per year on cost Plant & equipment-per year on reducing balance 50% The company charges depreciation only on assets held at balance sheet date. Depreciation is to be allocated as follows: % of the depreciation is to be charged to cost of sales % each to distribution costs and administration expenses 60% 20% Value of the land element included in Land and Buildings is The cost of buildings purchased during the year was Closing inventory at 31 December 2017 is valued at Accruals and prepayments were as follows: 60,000 20,000 425 (2) (3) Accruals Prepayments '000 Distribution costs Administration expenses 130 125 115 The Corporation Tax liability for the year to 31 December 2017 is estimated to be 25,400,000. The company issued 10,000,000 shares at a premium of 20% on 1 September 2017. This was correctly accounted for. (4) (5) (6) The debentures were issued on 1 Aug 2014. (7) A final dividend of 4 cents per share is proposed. Requirement (i) Prepare, for publication, the following financial statements for ORANGE Ltd in accordance with the requirements of international standards, (using the function of expenditure method for the statement of comprehensive income): (I) a Statement of Comprehensive Income for the year to 31 December 2017, (II) a Statement of Changes in Equity for the year end 31 December 2017 and (III) a Statement of Financial Position as at 31 December 2017.

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Statement of Comprehensive Income for the year ended December 31, 2017 Sales 393000 Cost of goods sold Beginning inventory 375 Add : purchases 189000 Add : Depreciation 11700 Less :Ending Inventory 425 Cost of goods sold 200650 Gross profit 192350 Operating expenses Disribution costs 4235 Administration costs 4180 Total expenses 8415 Income from operations 183935 Finance cost -35 Income before taxes 183900 Tax expense 25400 Net Income 158500 Statement of Changes in Equity for the year ended December 31, 2017 Ordinary Shares beginning Balance 60000 Add : Issued during the year 10000 Ordinary Shares ending Balance 70000 Retained Earning beginning balance 29265 Add : net income 158500 Less : proposed dividends 2980 Retained Earning ending balance 184785 Share premium beginning balance 1000 Add : Issued during the year 2000 Share premium ending balance 3000 Statement of Financial Positions Asset Current assets Cash 90 Trade Receivable 240 Inventory 425 Prepayments 210 Total current assets 965 Non-current assets Land 60000 Buidlings 300000 Less : accumulated depreciation 78000 222000 Plant and equipment 45000 Less : accumulated depreciation 31500 13500 Total of Non-current assets 295500 Total assets 296465 Liabilities & shareholder's equity Liabilities Current Liabilities Trade payable 225 Tax payable 25400 Accured Expenses 255 Proposed Dividend 2800 Total Current Liabilities 28680 Non-current Liabilities 7% Loan Note(Debenture) 10000 Shareholder's equity Ordinary shares 70000 Share premium 3000 Retained earnings 184785 Total Shareholder's equity 257785 Total Liabilities and shareholder's equity 296465 We appreciate the rating of our answers. It encourages us to improve/maintain the quality of our solutions. Thank You.

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