In: Accounting
Question 1: Preparation and Presentation of the Balance Sheet/Statement of Financial Position
Upside-Down Trading Limited, a company listed on the Music Stock Exchange, is a trading and investment entity. The company trades exclusively in steel and aluminium component, and also has an investing arm.
Upside-Down Trading Limited have just engaged you as their finance director to assist in the preparation of the entity’s 2021 financial statements. The financial period of the company is from September 1 to August 31.
The company has provided you the following list of accounts, and the trial balance totals per each account, as at end of their current final year:
Account Name |
Trial Balance Figure |
||
11% Debentures |
$50,000,000 |
||
7% Bonds (Due in Less than 12 Months) |
$5,000,000 |
||
Accounts Payable |
$15,890,000 |
||
Accounts Receivables |
$14,500,000 |
||
Cash and Cash Equivalents |
$11,950,000 |
||
Copyright and R&D |
$4,100,000 |
||
Cost of Goods Sold |
$56,100,390 |
||
Current Tax Liabilities |
$6,900,000 |
||
Employee Benefit Obligations |
$8,100,000 |
||
Finance Expenses |
$4,502,000 |
||
Goodwill |
$18,540,000 |
||
Inventory |
$75,650,000 |
||
Loans Due in Less than 12 Months |
$16,850,000 |
||
Long-Term Investments |
$196,000,000 |
||
Long-Term Loans |
$215,580,000 |
||
Loss on Sale of Equipment |
$5,100,450 |
||
Other Payables |
$1,830,000 |
||
Other Receivables (Due in more than 12 Months) |
$1,520,000 |
||
Paid-Up Capital |
$218,702,000 |
||
Plant and Equipment |
$168,221,000 |
||
Prepaid Expenses |
$5,020,000 |
||
Property |
$312,512,000 |
||
Reserves |
$150,072,000 |
||
Retained Earnings |
$122,589,000 |
||
Sales Revenue |
$158,900,000 |
||
Short-Term Investments |
$6,500,000 |
Additional Information:
Required:
Using the information supplied, prepare a balance sheet/statement of financial position for Upside-Down Trading Limited for the end of 2025 that conforms with IFRS IAS 1 recommendations and requirements of the course.
Statement of financial position / Balance Sheet
Statement of financial position | |
31-Aug-21 | |
ASSETS | |
Non-current assets | |
Property, plant and equipment | $ 487,733,000 |
Intangible assets | $ 22,640,000 |
Long-Term Investments | $ 196,000,000 |
Other Receivables (Due in more than 12 Months) | $ 1,520,000 |
$ 707,893,000 | |
Current assets | |
Accounts Receivables | $ 14,500,000 |
Cash and Cash Equivalents | $ 11,950,000 |
Inventory | $ 65,650,000 |
Prepaid Expenses | $ 5,020,000 |
Short-Term Investments | $ 6,500,000 |
$ 103,620,000 | |
Total assets | $ 811,513,000 |
LIABILITIES | |
Non-current liabilities | |
11% Debentures | $ 50,000,000 |
Long-Term Loans | $ 219,580,000 |
Employee Benefit Obligations | $ 8,100,000 |
$ 277,680,000 | |
Current liabilities | |
7% Bonds (Due in Less than 12 Months) | $ 5,000,000 |
Loans due in Less than 12 Months | $ 12,850,000 |
Accounts Payable | $ 15,890,000 |
Current Tax Liabilities | $ 6,900,000 |
Other Payables | $ 1,830,000 |
$ 42,470,000 | |
Total liabilities | $ 320,150,000 |
Net assets | $ 491,363,000 |
EQUITY | |
Paid-Up Capital | $ 218,702,000 |
Reserves | $ 150,072,000 |
Retained Earnings at the beginning | $ 130,089,000 |
Net Income for the year | $ (7,500,000) |
Total Equity | $ 491,363,000 |
Assumption: The property is stated at historical cost and considered as non-investment property and hence not fair valued.
Refer following images for formula and calculations