Question

Illustrative Example: Retailer Ltd: Preparation of financial statements

Retailer Ltd, recorded the following transactions during the year:

Rm

Sales :57,959

Other non-current assets : 6,304

Cost of sales :55,033

Trade and other receivables: 1,607

Trade and other payables: 8,568

Administration expenses :1,860

Loans (due after one year) :10,711

Loans (due within one year): 2,826

Other current liabilities :7,901

Property, plant and equipment: 17,978

Goodwill :2,874

Finance income :29

Other current assets: 4,246

Cash :3,082

Share capital and premium :5,502

Pension liabilities :3,175

Finance costs :693

Taxation cost: 49

Inventories :2,430

Investments (long term) :1,920

Investments (short term) :3,463

Taxation payable: 419

Other non-current liabilities :1,688

Retained earnings :3,114

Using the information above you are asked to:

2. Prepare a balance sheet at the end of the year and calculate net assets (assets less liabilities) and equity

Answer 1

Assets	Amount
Current Assets
Cash	$     3,082
Trade and other receivables	$     1,607
Inventory	$     2,430
Investment	$     3,463
Other Current Assets	$     4,246
Total Current Assets	$   14,828
Non current assets
Property, plant and equipment	$   17,978
Goodwill	$     2,874
Investments	$     1,920
Other Non current assets	$     6,304
Total non current assets	$   29,076
Total Assets	$   43,904
Current Liabilities
Trade and other payables	$     8,568
Loans	$     2,826
Taxation Payable	$         419
Other current liabilities	$     7,901
Total current liabilities	$   19,714
Non current liabilities
Pension Liabilities	$     3,175
Loan	$   10,711
Other non current liabilities	$     1,688
Total non current liabilities	$   15,574
Equity
Share capital and premium	$     5,502
Retained Earnings	$     3,114
Total Equity	$     8,616
Total Equity and liabilities	$   43,904

Net Assets = 43,904 - 35,288 = $ 8,616