Reference no: EM132768176
Problem - SASOON Ltd places the following information at your disposal:
Trial balance on 30 June 2020
N$
Vehicle at cost 79,450
Equipment at cost 29,200
Accumulated depreciation: Vehicles 14,600
Accumulated depreciation: Equipment 9,300
Debtors control 12,745
Allowance for credit losses 540
SARS (income tax) 70,600(dr)
Retained earnings (1 July 2019) 8,047
Sales 904,600
Commission received 6,400
Auditors remuneration (N$2,000 for fees and N$400 for costs) 2,400
Bank charges 206
Salaries 16,000
Irrecoverable debt 493
Loss on sale of asset 702
Distribution costs 880
Interest on bank overdraft 273
Interest on mortgage 2,500
Sales returns 840
Ordinary dividends 11,050
Directors remuneration (for executive directors)* 7,450
Dividends received on listed investment 1,075
Electricity and water 2,350
Gross profit 184,140
*Classified as administrative expenditure
The following information must still be taken into consideration:
1. One of the non-executive directors has not yet received his remuneration of N$1,500.
2. Account received from the municipality for water and electricity - not yet paid - N$124.
3. The accounting policy of the company stipulates, among others that depreciation on vehicles should be calculated at 10% per annum on cost of vehicles and at 15% per annum on the carrying value of equipment.
4. Additional credit losses of N$132 must be written off. The allowance for credit losses must be adjusted to N$450.
5. A final dividend of 63c per share was declared.
6. The normal income tax for the accounting period amounts to N$72,050.
7. The company is registered with 100,000 ordinary shares of N$5 each, of which 50,000 ordinary shares were issued.
Required -
1. Prepare the statement of profit or loss and other comprehensive income of the company according to the function of expenditure method for the year ended 30 June 2020 to comply with the requirements of IAS 1.
2. Prepare the statement of financial position as at 30 June 2020 to comply with the requirements of IAS 1.