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 1 600
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