Question

You are the financial accountant of Réka Ltd, a manufacturing company. The following accounts were extracted from its trial balance as at 30 June 2020:

	Debit	Credit
	$	$
Cash at bank	12,000
Cash in hand	123,000
Accounts receivable	134,500
Rent receivable	5,500
Inventory	200,460
Raw materials	58,000
Prepaid management fees	12,800
Investment property	350,000
Loan receivable	56,000
Land (at cost)	560,000
Plant and equipment (at cost)	562,300
Accumulated depreciation – plant and equipment		224,920
Patents	59,200
Accounts payable		63,500
Allowance for doubtful debts		12,800
Tax liability		26,400
Accrued wages payable		6,700
Interest payable		2,650
Dividends payable		25,000
Provision for annual leave		29,400
Provision for long service leave		32,000
Provision for warranty		16,400
Debentures (due July 2022)		300,200
Bank loan		265,000
Share capital		450,000
General reserve		153,400
Retained earnings		525,390
	2,133,760	2,133,760

Additional information:

• Provision for annual leave includes $15,000 payable within 1 year.
• Provision for long service leave includes $9,000 payable within 1 year.
• Provision for warranty includes $6,500 payable within 1 year.
• All bank loans are payable after 1 January 2022.
• Tax liability represents tax to be payable by 30 June 2021.
• In relation to the statement of financial position, where AASB 101 requires entities to disclose further sub-classifications of the minimum line items on the face of the statement or in the notes, the directors of Réka Ltd want to report only the minimum line items on the face of the statement, and leave the sub-classifications to be disclosed in the notes.

Required:

Prepare the statement of financial position of Réka Ltd as at 30 June 2020 in accordance with AASB 101, using the line items that a listed company is likely to use. Show all workings. Notes and comparative figures are not required.

Answer 1

1. Statement of financial position of Réka Ltd as at 30 June 2020 in accordance with AASB 10

Statement of financial position of Réka Ltd as at 30 June 2020
Particulars	$
Equity and Liabilities
Shareholder's Equity:
Share capital	450,000
General reserve	153,400
Retained earnings	525,390
Long Term Liabilities
Debentures (due July 2022)	300,200
Bank loan	265,000
Provision for annual leave	14,400
Provision for long service leave	23,000
Provision for warranty	9,900
Total Non Current Liabilities	612,500
Current Liabilities
Accrued wages payable	6,700
Interest payable	2,650
Dividends payable	25,000
Provision for annual leave	15,000
Provision for long service leave	9,000
Provision for warranty	6,500
Tax liability	26,400
Accounts payable	63,500
Total Current Liabilities	154,750
Total Liabilities	767,250
Total Equity and Liabilities	1,896,040
Assets
Non-Current Assets
Land (at cost)	560,000
Plant and equipment (at cost)	562,300
Accumulated depreciation – plant and equipment	(224,920)
Patents	59,200
Total Non - Current Assets	956,580
Current Assets
Cash at bank	12,000
Cash in hand	123,000
Accounts receivable	134,500
Allowance for doubtful debts	(12,800)
Rent receivable	5,500
Inventory	200,460
Raw materials	58,000
Prepaid management fees	12,800
Investment property	350,000
Loan receivable	56,000
Total Current Assets	939,460
Total Assets	1,896,040