Reference no: EM131044557
PART
The comparative statement of financial position and statement of profit or loss of Griffin Ltd for the year ended 30 June 2016are as follows:
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GriffinLtd
Statement of Financial Position
as at 30 June 2016
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2016
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2015
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Current assets
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Cash at bank
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$ 114 000
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$ 70 000
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Cash deposits (30-day)
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80 000
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30 000
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Accounts receivable
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82 000
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75 000
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Allowance for doubtful debts
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(9 000)
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(5 000)
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Interest receivable
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4 000
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3 000
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Inventories
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226 000
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200 000
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Prepayments
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3 000
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7 000
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500 000
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380 000
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Non-current assets
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Land
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120 000
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100 000
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Plant
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700 000
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600 000
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Accumulated depreciation
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(180 000)
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(140 000)
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Investment in associate
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92 000
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80 000
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Brand names
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90 000
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120 000
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822 000
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760 000
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Total assets
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$ 1322 000
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$ 1 140 000
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Current liabilities
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Accounts payable
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$ 196 000
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$ 180 000
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Interest payable
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18 000
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12 000
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Current tax payable
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42 000
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40 000
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256 000
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232 000
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Non-current liabilities
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Borrowings
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138 000
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98 000
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Deferred tax liability
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40 000
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35 000
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Provision for employee benefits
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33 000
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20 000
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211 000
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153 000
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Total liabilities
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467 000
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385 000
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Equity
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Share capital
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530 000
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500 000
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Retained earnings
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325 000
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255 000
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855 000
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755 000
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Total liabilities and equity
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$ 1 322 000
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$ 1140 000
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GriffinLtd
Statement of Profit or Loss
for the year ended 30June 2016
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Sales
Cost of sales
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$ 1? 980? 000
(1? 230? 000)
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Gross profit
Interest
Share of profits of associate
Gain on sale of plant
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750? 000
2? 000
20? 000
8? 000
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Total income
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780? 000
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Expenses
Salaries and wages
Depreciation
Discount allowed
Doubtful debts
Interest
Other (including impairment of brand names $30? 000)
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$ 452? 000
50? 000
8? 000
6? 000
21? 000
86? 000
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623? 000
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Profit before tax
Income tax expense
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157? 000
(47? 000)
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Profit for the year
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110? 000
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Additional information in relation to the year ended 30 June 2016:
a) There were no cash sales during the year.
b) Bad debts written off during the year amounted to $2000
c) 30-day cash deposits are used in the course of the daily cash management of the company
d) There have been no asset revaluations during the year
e) Disposals of plant comprised: original cost $50 000, accumulated depreciation $10 000
f) Movements in "Investment in associate" account comprised $20 000 share of profit of associate less $8 000 dividend received
g) Income tax expense comprises current tax payable component of $42 000 and a deferred tax liability component of $5 000
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