Question

Topic 2: Presentation of financial statements

The following balances are extracted from the trial balance of Tammy Ltd for the year ended 30 June 2018:

	$
Sales revenue	3,200,000
Interest income	360,000
Rental income	40,000
Interest expense	50,000
Income tax expense	300,000
Administrative salaries	340,000
Depreciation of office equipment	140,000
Bad debt expense	220,000
Cost of sales	1,100,000
Foreign currency translation loss	100,000

Additional information:

• During the period, land was revalued upwards by $160,000 (net of tax).
• At 1 July 2017, the balances of foreign currency translation reserve and revaluation reserve were $110,000 and $40,000 respectively.
• On 15 November 2017, a plant with a carrying amount of $130,000 was destroyed by an earthquake.
• Balance of retained earnings as at 1 July 2017 was $3,900,000 and dividends of $400,000 were paid during the financial year.
• Issued share capital was $1,020,000 on 1 July 2017. There was no new issue of shares during the financial year.

Tammy 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.

Required:

Prepare a statement of profit or loss and other comprehensive income and a statement of changes in equity for Tammy Ltd for the year ended 30 June 2018, according to the requirements of AASB 101. Notes to the account are not required but figures in your statements must be supported by explanations or workings.

Answer 1