The following additional information was noted during the preparation of financial statements for the year ended 30 June 2019:
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I want to ask a question form assignment in ACFI 2011 course.


The following additional

information was noted during the preparation of financial statements for the year ended 30 June 2019:

The bank loan is for 5 years and repayable in full at the end of the term. The interest rate is 9% and it is secured over the land.


What did I need to do to prepare income statement, balance sheet, change in equity, note on 30 June 2019.

Is it I need to add interest expense and accounts payable before I do the statement? Or just write it in the note?






Newsurf Ltd, has been manufacturing and selling surfboards for the last two years. Newsurf Ltd commenced operations on 1 July, 2017 by issuing 500 000 $3.50 shares, payable in full on application. There were no share issue costs.

For the year ending 30 June 2019, the company recorded the following aggregate transactions:

Accounts $

Sales 5 385 000

Interest income 11 000

Cost of Sales 3 409 000

Gain on sale of plant 25 000

Employee benefit expenses - Admin 136 000

Depreciation expense- Admin 54 000

Selling & Distribution Expenses 932 000

Insurance expense - Admin 60 000

Doubtful debts expense 5 000

Interest expense 38 000

Other borrowing expenses 4 000

Income tax expense 268 000


The following additional information was noted during the preparation of financial statements for the year ended 30 June 2019:

 On 1 July 2018 an additional 100 000 fully paid shares were issued and fully paid to raise $400 000.

 A cash dividend of $180 000 was declared and paid during the 2019 financial year and a final dividend for 2019 of $90 000 was proposed but not recognised in the financial statements.

 Inventory was measured at the lower of cost and net realizable value.

 Buildings, plant and equipment were measured at cost. The benefits were expected to be received evenly over the useful life of the asset.

 Land was revalued upward by $100 000 (related income tax for this transaction was $30 000). The revaluation gain will not be reclassified and has been recorded in the 'Land Revaluation Surplus'. The valuation was conducted by the registered valuer, Fair Valuations Pty Ltd.

 Financial assets held for trading are equity investments that are held for the purpose of selling and short-term profit taking.

 $35 000 of other loans are repayable within 1 year

 $90 000 of bank loans are repayable within 1 year. The remaining amount is payable in full at the end of 2023.

 The provision for employee benefits includes $47 000 payable within 1 year.

 The warranty provision is in respect of a 12-month warranty given on certain goods sold.

 The bank loan is for 5 years and repayable in full at the end of the term. The interest rate is 9% and it is secured over the land.

 NewSurf Ltd uses the single statement format for the statement of profit or loss and other comprehensive income and classifies expenses by function within the statement.


Summarised account balances are provided below:

Year-end balances, 30 June 2019 $

Accounts receivable - trade 977 000

Allowance for doubtful debts/ impairment 12 000

Bank Overdraft 86 000

Cash on Hand 15 000

Cash on deposit, at call 442 000

Other receivables 77 000

Raw Materials inventories, 30 June 2019 176 000

Finished goods inventories, 30 June 2019 726 000

Land 416 000

Buildings 160 000

Accumulated depreciation - buildings 45 000

Plant and equipment 1 350 000

Accumulated depreciation - plant and equipment 495 000

Patents 46 000

Accumulated amortisation of patent 5 000

Goodwill 910 000

Financial assets held for trading 215 000

Bank loans 110 000

Other loans 527 000

Accounts payable- trade 535 000

Provision for employee benefits 88 000

Provision for warranty 67 000

Current tax liability 65 000

Deferred tax asset 34 000

Retained earnings, 30 June 2018 796 000

Share Capital 2 150 000

Dividends paid 180 000

Land revaluation surplus 228 000

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