Reference no: EM131525772

Assessment

Case Study - Prepare Comprehensive Income Statement and Statement of Changes in Equity

Fergie Ltd incurs the following expenses and income for the year ended 30 June 2015.

                                                                                         $000
Income
Interest revenue                                                                  200
Sales revenue                                                                      1600
Expenses
Cost of goods sold                                                               550
Administration salaries                                                          170
Depreciation of office equipment                                            70
Major loss owing to insolvency of customer                            110
Damage caused by 'space junk' re-entering atmosphere          65
Interest expense                                                                 25
Income tax expense                                                            150
Opening equity                                                                   2460

The income tax expense of $150 000 is calculated after considering a tax deduction of $21 450, which related to the damage caused by the space junk. Tax rate is 33 per cent.

During the year there has also been an increase in the revaluation surplus of $80 000 as a result of a revaluation of land of $80 000. The balance of the revaluation surplus at 1 July 2014 was $nil. A new accounting standard has also been introduced, which has a transitional provision allowing initial write-offs to be recognised as a decrease against retained earnings. The decrease against retained earnings amounts to $50 000. Retained earnings at the beginning of the financial year were $1 950 000, and dividends of $200 000 were paid during the financial year. Issued share capital at 1 July 2014 and 30 June 2015 was $510 000.

REQUIRED

Prepare an income statement (in a single statement with expenses shown by function) and a statement of changes in equity in conformity with AASB 101. Provide only those notes that can be reasonably determined from the above information.