Question

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:
1. During the year, Upside-Down Trading Limited purchased $7,000,000 worth of machine
equipment that has yet to be added to the relevant non-current asset account.
2. For the period ended August 31, 2021, Upside-Down Global Trading Limited recorded a loss of
$7,500,000. This amount has already been closed to the Retained Earnings balance as per the trial
balance.

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3. The internal auditor found from a recent review that $4,000,000 of loans listed as being payable in
next 12 months are not due till 2026.
4. All prepaid expenses are expected to be consumed by the end of December 31, 2021.
5. Upside Down Trading Limited has been offered $15,000,000 to sell its properties. The transaction
would – if accepted – be accepted in June 2028.
6. In 2019 the company sold property valued at $19,000,000 for $26,000,000. The company is of the
opinion that in 2024 it will purchase property to the value of $11,000,000.
7. The value of the Inventory as shown in the trial balance is the net realizable value. The value of
inventory at cost is $65,650,000.
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.

justify your answer with all steps clearly please (NOT HAND WRITING ) thanks

Answer 1

Statement Of Balancesheet
Assests:	31-Aug-21
Non- Current Assets:
Property, plant & Machinery	$487,733,000
Intangable Assets	$22,640,000
Long term Investments	$196,000,000
Other Receivables	$1,520,000
TOTAL(A)	$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
Shorterm Investments	$6,500,000
TOTAL( B)	$103,620,000
TOTAL ASSEST (A+B)	$811,513,000
Liabilities
Non - Current Liabilities:
11% Debentures	$50,000,000
Long -Term Loans	$219,580,000
Employee benfit Obligations	$8,100,000
TOTAL(A)	$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
TOTAL (B)	$42,470,000
TOTAL LIABILITIES (A+B)	$320,150,000
Net Assests( Total Assests- Toatal Liabilities)	$491,363,000
EQUITY:
Paid up Capital	$218,702,000
Reserves	$150,072,000
Retained Earnings At Beginning	$130,089,000
Net Income For the year	($7,500,000)
Total Equity	$491,363,000