2 TUTORIAL SOLUTIONS
Exercise 19.2 Current asset and liability classifications
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Current Liabilities
Trade and other payables
Financial liabilities
Current tax liability
$000
10
95
180
12
297
$000
130
125
30
285
(g)
[(b) 100 000 (f) 5 000]
[(e) 120 000 + (i) 60 000]
(d)
[(a) 25 000 + (c) 85 000 + (h) 20 000]
[(j) 50 000 + (k) 75 000]
(l)
The dividend payable is not a provision as the timing and amount are reasonably certain. It may
be shown separately if relevant to an understanding of the financial position.
Problem 19.8 Preparation of a statement of financial position, statement of comprehensive
income and statement of changes in equity
Matthew Ltd
Statement of Comprehensive Income for the year ended 30 June 2010
Revenue
Other income
Changes in inventories of work-in-progress and finished goods
Raw materials used
Employee benefit expense
Depreciation expense
Impairment loss on patent
Rental expenses
Advertising expenses
Insurance expense
Freight-out expense
Doubtful debts expense
Other expenses
Finance costs
Profit before tax
Income tax expense
Profit for year
Other comprehensive income
Deferred cash flow hedge
Total comprehensive income
$'000
5 000
47
(65)
(2 200)
(950)
(226)
(25)
(70)
(142)
(45)
(133)
(10)
(8)
(30)
1143
(320)
823
(65)
758
Explanations
This solution assumes that all of the deferred cash flow hedge arose in the current period and
is, accordingly, recognised in comprehensive income for the year.
Other income comprises interest income $22 000 + sundry income $25 000
= $47 000.
Matthew Ltd
Statement of Financial Position at 30 June 2010
$000
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Non-current plant Assets
Property, and equipment
Goodwill
Other intangible assets
Total assets
Equity and Liabilities
Current liabilities
Trade and other payables
Short-term borrowings
Current portion of long-term borrowings
Current tax payable
Provisions
124
504
705
1 333
1 322
620
90
2 032
3 365
452
40
110
35
120
757
Non-current liabilities
Long-term borrowings
Deferred tax liability
Total non-current liabilities
Total liabilities
432
140
572
1 329
Equity
Share capital
Retained earnings
Deferred cash flow hedge
Total equity
Total equity and liabilities
1 178
923
(65)
2 036
3 365
Explanations
Cash and cash equivalents comprise cash $4 000 + cash on deposit, at call $120 000 = $124
000.
Inventories comprise raw materials $320 000 + finished goods $385 000 = $705 000.
Trade and other receivables comprise:
Trade debtors
Allowance for doubtful debts
Other debtors
$'000
495
(18)
27
504
Property, plant and equipment comprises:
Land
Buildings
Accumulated depreciation
Plant and equipment
Accumulated depreciation
$'000
94
220
(52)
1 380
(320)
1 322
This answer assumes all of the Provision for employee benefits is current.
Current portion of long-term borrowings comprises $20 000 + $90 000 = $110 000.
Non-current financial liabilities comprise:
Banks loans
Repayable within 12 months
Other loans
Repayable within 12 months
$'000
92
(20)
450
(90)
432
Refer to the Statement of Changes in Equity for workings for equity balances.
Matthew Ltd
Statement of Changes in Equity for the year ended 30 June 2010
Balance at 30 June 2009
Comprehensive income for
the year
Dividends
Dividends reinvested
Balance at 30 June 2010
Share
Retained Cash Flow
Capital
Earnings
Hedge
$000
$000
$000
1137
310
0
823
(65)
(210)
923
$000
1447
758
(210)
41
41
1178
Total
(65)
2 036