Reference no: EM132616263

The following figures were calculated for Hakuna Ltd's draft single entity financial statements for the year ended 31 March 2019.

$

Profit before tax 475,300

Total assets 852,500

Total liabilities 302,400

However, additional information is now available and the draft figures should be adjusted.

• Inventories were purchased on 1 February 2019 from an overseas supplier for €25,000. The invoice remained unpaid at 31 March 2019. The cost of the inventories was correctly translated and recognised at the date of delivery along with the corresponding liability. No other accounting entries were made.

Exchange rates are:

1 February 2019 €1: $0.89

31 March 2019 €1: $0.81

• Research and development costs of $185,000 were incurred in the period on a new product design and recognised within intangible assets. No other accounting entries were made in respect of these costs. $45,000 was incurred during the early stages of the project before the new design was assessed as economically viable. Of the remaining $140,000 costs incurred, $15,000 was incurred on a promotional event, $8,000 on staff training and $12,000 on a pre-production prototype.
• Orders for the new product were taken at the pre-launch event with total deposits of $18,000. These deposits were recognised as revenue. The design will not be ready for production until 1 June 2019.

Requirement

Problem 1: Calculate the following revised figures for inclusion in Hakuna Ltd's single entity financial statements for the year ended 31 March 2019:

1. Profit before tax
2. Total assets
3. Total liabilities