Refer to the 2013 annual report of Country Road Limited on its website, www.countryroad.com.au (or google ‘annual report 2013 country road’), and answer the following questions using the consolidated income statement and balance sheet/ statement of financial position and notes to the consolidated financial statements.
1. The Country Road Limited income statement shows a deduction (in brackets) for income tax expense. Would this expense item be seen in the income statement of a partnership? Explain your answer.
2. In the statement of changes in equity regarding retained earnings, how is the total profit available appropriated? How does the allocation of the total profit available for appropriation in a partnership differ from that shown for Country Road Limited? Explain the reasons for any differences.
3. Refer to the balance sheet (statement of financial position) of Country Road Limited and the note titled ‘issued capital’. How do these differ from that of a typical partnership? Explain.
4. Country Road Limited is required to produce a statement of cash flows (cash flow statement) and include this in its annual financial statements. Would the typical partnership be required to prepare such a statement? Why or why not? Would a typical partnership prepare such a statement? Explain.