Cow-F04B-FR A1.docx

8/17/2019 Cow-F04B-FR A1.docx

1/60

Preparation of Financial Statements

A report on

Preparation of Financial

Statement

Prepared for: Ms. Kim Oanh Vu

Unit 10: Financial Accounting and eporting

!an"ing Academ#$ %anoi

!&'( %)* in !usiness +Finance,

-ord numer: /$2

Prepared #

Ph3m &h4# %5ng 6 (o7 6 F08!

egistration )o. 9&PF080;;

Sumission *ate: /


2/60


(o7F08!F A1 Page /


3/60


Table of Contents'>'(U&9V' SUMMA?..........................................................................8

9)&O*U(&9O)....................................................................................;(%AP&' 1: F9)A)(9A@ 9)FOMA&9O).................................................

eport on dierent information needs of dierent user groups........

(%AP&' /: 'PO& &O A% !OO).......................................................2

Part 1: eport on Bnancial statements in a form suitale forpulication # a sole trader...............................................................2

1.1 CournaliDing transactions.............................................................2

1./ Preparing &accounts.................................................................1;

1.< Preparing &rial alance............................................................../<

1.8 Preparing 9ncome Statement...................................................../;

1.; Preparing Statement of Financial position................................./

Part /: eport on Bnancial statements in a form suitale forpulication # partnership............................................................../

1.1 CournaliDing transactions.........................................................../

1./ Preparing &accounts.................................................................


4/60


1./ Preparing Bnancial statements of eGuit# changes..................82

1.< Preparing consolidated alance sheet for the #ear ended


5/60


EXECUTIVE SUMMARY

Finance plays a crucial part in every business. It has a strong influence on every aspects

within company and be considered as a key for business performance. In this report,

some issues related to financial statments will be discuss based on scenarios of some

companies

The first scenario is about Ah Boon who is a civil engineering and building contractor

which was established as a sole proprietor specializes in drainage works repair of

vehicular bridges, road pavement construction sewerage system, tidal gate structures

etc. The way how to prepare financial statements in a form suitable for publication by a

sole trader will be shown in this company.

The second case is still about Ah Boon but he is now keen to e!pand his businesses to

become as a sole distribution agent for building materials. Ah Boon"s, on # $uly %&

decided to admit a new business partner, 'heung, to transform his sole proprietor

enterprise into a partnership. This part will discuss about financial statement made in a

form suitable for publication by partnership.

Another case, which is about Boon 'heung (imited company, will show the way how

to prepare financial statements in a form suitable for publication by limited company.

The last two companies are )arner (td and *ereira (td which consolidate. In this part,

the recording and reporting the activities of a group of companies will be pointed out.

(o7F08!F A1 Page ;


6/60


INTROUCTION

&his report aims to discuss aout Bnancial statements from completeor incomplete records as 7ell as Bnancial information in accepted

formats for pulication. 9n more particular$ se=eral follo7ing points

7ill e mentioned:

Preparing Bnancial statements for a =ariet# of usinesses from

trial alance$ ma"ing appropriate adHustments Preparing Bnancial statements from incomplete records

Preparing a consolidated alance sheet and proBt and lossaccount for a simple group of companies

'Iplaining ho7 the information needs of dierent user groups

=ar# Preparing Bnancial statements in a form suitale for pulication

# a sole trader$ partnership and limited compan#

+ot only provide the theory related to financial terms, this paper also provides relevant

analysis and e!planation in each area. oing this report, some information sources wereused -uch as Internet and books, some lectures, /ournal articles, and business

magazines were also use to utilize data related to the topic in the scenario.

0opefully, this report will be useful not only for business students but also for every

person who want to know and learn about finance, especially financial statements.

(o7F08!F A1 Page


7/60


C!APTER "# FINANCIA$ INFORMATION

Report on %i&erent information nee%s of %i&erent

'ser (ro'ps

Financial information is the heart of usiness management. 9t is

almost impossile to run a usiness eecti=el# 7ithout eing ale to

read$ understand$ and anal#De accounting reports and Bnancial

statements. +Valencia$ n.d.,

&here are man# dierent users for Bnancial information and the

nature of these uses =aries depending on its intended purpose. 9t is

the user of the Bnancial information 7ho determines ho7 it is to e

used. Accounting must meet the needs of the indi=idual users and

therefore must e JeIile enough to satisf# a =ariet# of purpose.

+Acs$ n.d.,

&he =arious user groups could e classiBed into t7o main groups:

internal users and eIternal users. O=erall$ the apparentl# di=ergent

needs of internal and eIternal users of accounting information ha=e

resulted in the de=elopment of t7o sudisciplines 7ithin the

discipline$ namel# Management Accounting and Financial Accounting.

+Pretoria$ n.d., *rur# +/000, said that Management Accounting is

concerned 7ith the pro=ision of information to people 7ithin the

organiDation$ 7hereas Financial Accounting is concerned 7ith the

pro=ision of information to sta"eholders outside the organiDation.

9n more particular$ there are some main users of each group and their

information needs 7ill e discussed elo7:

)ro'ps

'ser

Users P'rpose Information nee%s

Interna

l Users

O7ners

+sole

o7ners$

For anal#Ding the

=iailit# and

proBtailit# of their

&he# mainl# reGuire

information aout the

proBt made and the

(o7F08!F A1 Page E


8/60


partners, in=estment and

determining an#

future course of

action. +AccoutingSimpliBed$ n.d.,

di=idend made. &he#

eIpect to recei=e a

di=idend pa#ment as their

share of the proBts. &he#are interested in the proBt

and loss statement.

+Alunct$ n.d., &he# can Bnd

those information in

income statement or

alance sheet.Managers

+(FOs$

('Os$

(OOs,

For anal#Ding the

organiDations

performance and

position and ta"ing

appropriate measures

to impro=e compan#

results. +Accouting

SimpliBed$ n.d.,

Managers reGuire

9nformation that 7ill assist

them in their decision

ma"ing and control

acti=ities. For eIample$

information is needed on

the estimated selling

prices$ costs$ demand$

competiti=e position and

proBtailit# of =arious

productsL ser=ice that are

pro=ided # the

organiDation. +eaich$

/01/,. -ith this t#pe of

users$ normall#$ the#

reGuire all Bnancial

statements to ha=e an

o=erall picture of

compan#s operating.'mplo#e

es

For assessing

compan#s proBtailit#

and its conseGuence

on their futureremuneration and Ho

'mplo#ees reGuire

information on the ailit#

of the Brm to meet 7age

demands and a=oidredundancies. +eaich$

(o7F08!F A1 Page


9/60


securit#. +Accouting

SimpliBed$ n.d.,

/01/, &hese information

are$ for eIamples: eGuit#$

proBt$ re=enue$ and so on

7hich can e sho7n inincome statement.

E*tern

al

Users

o=ernm

ent

oces

+(entral

Statistical

Oce$

%M

e=enue

N

(ustoms,

For assessing ta!,

preparation of various

statistics on productivity,

commerce, etc. and the

various returns re1uired by

law.

2overnment e1uires such

information as the details of sales

activity, profits, investments,

stocks, dividends paid, the

proportion of profits absorbed by

ta!ation and so on. 34eaich,

%%5. These information can be

found in income statement or

balance sheet.

(reditors 'oncern about the capacity

of a business to pay its

liabilities as they fall due for

payment.

'reditors re1uire information on a

firm6s ability to meet its financial

obligations.34eaich, %%5

(ompetit

ors

For otaining the

operating of the

compan#. Using that

information to predict

compan#s eha=ior

and gain an

ad=antage o=er the

compan#. +M!A$ n.d.,

(ompetitors reGuire

information on the relati=e

strengths and 7ea"nesses

of the organiDation.

-hereas the ao=e users

share in the 7ealth of the

compan#$ competitors

reGuire the information

mainl# for strategic

purpose. +Pretoria$ n.d.,.

&he# are interested

in an# area of the

compan# 7hich could e

used to gi=e them an

ad=antage and this

(o7F08!F A1 Page 2


10/60


includes the 7a# the

compan# is Bnanced$ ho7

much it pa#s in 7ages$

ho7 much it pa#sfor its parts$ ho7 much it

charges for its products$

and so on. +-ard$ /00


11/60


C!APTER +# REPORT TO A! ,OON

Part "# Report on -nancial statements in a form

s'itable for p'blication b. a sole tra%er

A sole trader is a business that is owned by one person. This does not necessarily mean

that only one person works for the business. 0owever, a sole trader is directly involved

in the running of the business. All the capital of the company will belong to the only

person who starts up the business. 37ducation, %&&85

2enerally, sole trader has unlimited liability. Therefore, in its statement

• +et profit loss 9 'apital at the end of the period : rawings for the period ;


12/60


Accumulated depreciation6

purchased tools N eGuipment+E, ebit

Cre%it

ebit

Cre%it

ebit

Cre%it

ebit

Cre%it

*isposal of old =ehicle account

Vehicle account

Accumulated depreciation 6

old =ehicle


(ash in an"


ProBt on sale of =ehicle

1$000

1


13/60


14/60


+,Purchase of tools N eGuipmentSimilarl#$ the depreciation eIpense of purchased tools N

eGuipment 7ould e calculated as follo7s:

=

'ost #?,@&&

Depreciation for the year to 31 March 2011 (16,800

x 25%) 4,200

+E,Old =ehicle &he proBt +loss, from disposing of old =ehicle 7ould e

calculated as follo7s:

=

'ost of old vehicle #@,&&&

(ess accumulated depreciation #>,&&&

+et book value ,&&&

-ale price ?,&&&

*rofit on sale 1,000

+,)e7 =ehicle &he ne7 =ehicle purchased in 1 Octoer /010 is to e

depreciated at /; per annum on the straightline asis. &he

formula of this method is as follo7s: Acquistioncost − Residual value

Expected useful life of the asset

Esing this formula, the depreciation e!pense of new vehicle would be calculated

as follows

Depreciationof new vehicle=25,600×25 × 6

12=£3,200

+2,ent shop paid in ad=anceent of shop paid in ad=ance from


15/60


4ent per month from # $uly %& 9 && ! #%& 9 =?&&

4ent from # $uly %& to ># Darch %# 3C months5 9 ?&& ! C 9 =,8&&

&otal rent eIpense for the #ear ending


16/60


*lus closing balances of miscellaneous bill owing C@&

(ess opening balances of miscellaneous bill owing &

Discellaneous e!penses 3,540

+1;, 9n=entor# of materials &he in=entor# eIpense 7ould e calculated as follo7s:

=

%&

*lus purchased inventory #?C,%8&

(ess closing balance of inventory %8,>8&

Inventory e!penses 173,220

+1, SalesAt


17/60


"/+ Preparin( T2acco'nts

Cah in han!

= =

?,8&&

-ales #&,%@& rawing #?,&&&

'ash withdraw from Bank C?,%& 'ash paid into bank 8@,&@&

%&%,%?& 'losing balance cd #,@&

%&%,%?&

"a#ance $! 1,780

Cah in $an& = =

,%& 'ash in hand C?,%&

'ash in hand 8@,&@& Trade payable #?,C@&

-ales >,?& 4ent shop in advance ,%&&

(oan %&,&&& Insurance in advance >,%&&

-ales old vehicle ?,&&& +ew Tool H 71uipment #?,@&&

Bank payable 8,%&& +ew ehicle %,?&&

*hone payable #,%&

7lectricity payable #,@&

Discellaneous payable %,?&rawing C,?&&

-ales @&&

'losing balance cd &

383,760 383,760

"a#ance $! 0

Dra'in accont

=

(o7F08!F A1 Page 1E


18/60


'ash in hand

#?,&&

&

'ash in bank

C,?&

&

,?&&

*nrance expene

=

Insurance in

advance >,&&&

*nrance in a!+ance

= =

,&&&

*ayment insurance >,%&& 'losing balance cd #,?&&

8,?&& 8,?&&

"a#ance $! 1,600

#! too# - e.ip/ent

= =


19/60


Accumulated depreciation of

old tools H e1uipment

>,8&

&

cc/#ate! !epreciation of o#! too# - e.ip/ent

= =

'losing balance cd

#,&&

& ,8&&

#,&&

& #,&&&

"a#ance $! 15,000

rchae! too# - e.ip/ent

= =

'ash in bank #?,@&& 'losing balance cd #?,@&&

#?,@&& #?,@&&

"a#ance $! 16,800

Depreciation expene of prchae too# - e.ip/ent

=

Accumulated depreciation of purchase

tools H e1uipment

8%&

&

cc/#ate! !epreciation of prchae! too# - e.ip/ent

= =

'losing balance cd 8%&& epreciation e!penses 8%&&

8%&& 8%&&

"a#ance $! 4200

(o7F08!F A1 Page 12


20/60


#! +ehic#e accont

= =

,&&& #>,&&&

"a#ance $! 0

Dipoa# of o#! +ehic#e accont

= =

,&&&*rofit on sale #,&&& 'ash paid into bank ?,&&&

#C,&&& #C,&&&

e' +ehic#e

'ash in bank %,?&& 'losing balance cd %,?&&

%,?&& %,?&&

"a#ance $! 25,600

Depreciation expene of ne' +ehic#e

=

Accumulated depreciation of

new vehicle >,%&&

cc/#ate! !epreciation of ne' +ehic#e

(o7F08!F A1 Page /0


21/60


'losing balance cd >,%&& epreciation e!penses >,%&&

>,%&& >,%&&

"a#ance $! 3,200

ent hop pai! in a!+ance

= =


22/60


= =

*ayment from Bank #,%& ,8& >,8&

"a#ance $! 980

Mice##aneo expene

=

Discellaneous bill owing >,8&

"a! !e$t expene

=

Trade receivable %,?&

(o7F08!F A1 Page //


23/60


ra!e recei+a$#e

= =

,?&

Bad debts %,?&

'losing balance cd #C,#?&

8%@,?& 8%@,?&

"a#ance $! 19,160

*n+entory

= =

%& Supplies expense

173,22

0

Trade payable #?C,%8& 'losing balance cd %8,>8&

#C,?& #C,?&

"a#ance $! 24,340

Cot of oo! o#!

=

-upplies e!penses

#>,%%

&

)age of repair staff

#>?,8&

&

>&C,?%

&

ra!e paya$#e

= =

*ayment to suppliers #?,C@&


24/60


&


25/60


"/3 Preparin( Trial balance

First of all, capital at ># Darch %& needs to be calculated.

Based on the information of the scenario, it would be calculated as follows

TotalCapital=Totalasset −Totalliabilities

" D

tate/ent of financia# poition

As at 31 March 2010

= =

et

Tools and e1uipment cost %,%&&

epreciation to date ##,?&&

'arrying amount of tools H e1uipment to date #>,?&&ehicle cost #@,&&&

epreciation to date #>,&&&

'arrying amount of vehicle to date ,&&&

Inventories %@,>%&

Trade receivable #@,C@&

4ent paid in advance to >& $une %& #,&&

Insurance paid in advance to >& -eptember

%& #,8&&

Bank balance >,%&'ash in hand 8?&

ota# aet 72,980

ia$i#itie

Trade payable ?,C%&

*hone bill owing 8%&

7lectricity bill owing >?&

ota# #ia$i#itie ,&&

Capita# ?,%@&ota# capita# - #ia$i#itie 72,980

Total capital at 31 March 2010 equals to £65,280

A! ,OON SO$E TRAER

Trial ,alance

As at 31 March 2011 Account Debit Credit

R R(ash in hand 1$E0

(o7F08!F A1 Page /;


26/60


27/60


*nco/e tate/ent

For the year ended 31 March 2011

= =

a#e 8&@,C@&(ess cost of goods sold >&C,?%&

2ross profit CC,>?&

Add profit of sale vehicle #,&&&

#&&,>?&

e expene

Insurance >,&&&

-alaries #&,&&&

4ent of -hop ?,C&&

epreciation of new vehicle >,%&&

epreciation of old tools H e1uipment >,8&&epreciation of purchase tools H e1uipment 8,%&&

Telephone #,@&

7lectricity #,@?&

Discellaneous >,8&

Bad debts %,?&

Interest &&

8&,C8&

et profit 59,420

"/4 Preparin( Statement of Financial position

" D

tate/ent of inancia# oition

As at 31 March 2011

= =

on!current assets

+ew vehicle %,?&&

Accumulated depreciation of new vehicle >,%&&

'arrying amount of new vehicle %%,8&&


28/60


Trade receivables #C,#?&

4ent paid in advance #,@&&

Insurance paid in advance #,?&&

Inventory %8,>8&

8@,?@&ota# aet 93,880

"apital

At ># Darch %& ?,%@&

Add profit for the year C,8%&

(ess rawing ,?&&

At ># Darch %# 8C,#&&

on!current lia#ilities

(oan payable %&,&&&

"urrent lia#ilities

Trade payables @,#@&

*hone bill owing 8@&

7lectricity bill owing 88&

Discellaneous bill owing C@&

Account payable #8,&&

%8,@&

ota# capita# an! #ia$i#itie 93,880

(o7F08!F A1 Page /


29/60


Part +# Report on -nancial statements in a form

s'itable for p'blication b. partners8ip

*artnership, it is an agreement between two or more persons to engage in business in

common with a view to profit. It is desirable that partners have a written partnership

agreement outlining important points such as he agreed shares of capital contributions

and shares of profit, but there is nothing in law to say that any such written agreement is

re1uired. 37ducation, %&&85

"/" 0o'rnali1in( transactions

= =

+1, ebit

Cre%it

Agenc# commission due

(ommission

@@&

0+/, ebit

Cre%it

Stoc"

&rade pa#ale

@@,&&&

$000+


30/60


, Cre%it

ebit

Cre%it

Accrued =ehicle eIpense

Accrued =ehicle eIpense

(ash in an"

1


31/60


&he partnership commencement otained a gross proBt of 80

on all sales.

Sales 72,000

60 =1/0$000

+E,(ash recei=ed(ash recei=ed for the #ears to


32/60


*epreciation of premises is ; on cost *epreciation eIpense 6 premises /0$000 I ; =1$000

+10, *epreciation of =ehicle*epreciation of =ehicle is /0 on cost

*epreciation eIpense 6 =ehicle 10$000 I /0 =/$000

+1

R R

Opening alance Lf $/0

&rade eIpenses

prepaid

18$E/

0

(ommission 00 Vehicle eIpenses

1


33/60


A(enc. Commission %'e

R ROpening alance

Lf 00 !an" pa#ment 00

(ommission 0(losing alancecLd 0

180 180,alance b?% ==7

Tra%e pa.able

R R

*iscount recei=ed

/$80

0

Opening alance

Lf $800(ash paid to

suppliers

E$

00 Purchase

8800

0

(losing alance cLd1;/0

02$8

002$80

0

,alance b?%

"4+7

7

Stoc>

R ROpening alance

Lf

$80

0

(ost of goods sold and

losses

/$0

00

Purchases

88,0

00 (losing alance cLd1/80

0

28$8

0028$8

00

,alance b?%

"+5

77

)oo%s loss e*penses

R@oss from Jooding $000

@oss from /$000

(o7F08!F A1 Page


34/60


dampness

10$00

0

Cost of (oo%s sol%

R

Stoc" account

E/$0

00

isco'nt rerei:e% @ot8er income

R

&rade recei=ale

/$80

0

isco'nt alloBe% @e*penses

R

&rade recei=ale


35/60


1


36/60


epreciation e*penses of :e8icle

RPro=ision for depreciation of

=ehicle

/00

0

Pro:ision for %epreciation of :e8icle

R R

(losing alance cLd $000 Opening alance Lf 8$000

*epreciation

eIpenses /000

$000 $000 ,alance b?%


37/60


Opening alance

Lf /80 !penses 1",800

!an" pa#ment 18$E/0(losing alancecLd 10

18$20 18$20,alance b?% "


38/60


39/60


A! ,OON PARTNERS!IP

Trial balance

As at 31 March 2011

Account Debit Credit

R R

(ash in !an" 2$/0 &rade recei=ale 1


40/60


"/5 Preparin( Income Statement

A! ,OON PARTNERS!IP

Income statement

For the year ene 31 March 2011

R R

Sales

1/00

00

@ess (ost of goods sold

E/$00

0

)ross pro-t

5=67

77Add discount recei=ed /$800Add commission 0


41/60


"/4 Preparin( Statement of Financial position

A! ,OON PARTNERS!IP

Statement of Financial position As at 31 March 2011

R R#on$current assets

Premises

/0$00

0Pro=ision for depreciation of

premises

1


42/60


0

Accrual =ehicle eIpenses 1$001/

0

Total capital an% liabilities 5965


43/60


"/" 0o'rnali1in( transactions

= =

+1, ebit

ebit

Cre%it

Preference di=idend

Final ordinar# shares di=idend

Pro=ision di=idend

,&&&

/0$000

/E$000+/, ebit

Cre%it

*eenture interest eIpense

Accrued interest eIpense

8,&&&

8$000+


44/60


!ased on the information in (ompan#s oo"s$ the rates

eIpense 7ould e calculated as follo7s:

R

ates and insurance prepaid $;/0

@ess closing alance of rates paid in

ad=ance

;

/0

ates eIpenses

$00

0

+;,Appropriated proBt and general reser=e!ased on the information from compan#s oo"s )e7 =alue of eneral reser=e transferring 88$000 Q

10$000 R;8$000

+,Fittings and deli=er# =ehicles eIpense*epreciation to e pro=ided for Bttings and deli=er# =ehicles

for /010 at /0 per annum on cost. *epreciation eIpense of Bttings and deli=er# =ehicles

/$000 I /0 R1$800

"/+ Preparin( Trial balance

,OON C!EUN) $T

Trial balance

As at 31 !ece"#er 2010

Account Debit Credit

R ROrdinar# share capital /00$000Preference share capital 100$000(ash in an" E$/8(ash in hand /$20eneral reser=e ;8$000Furniture and deli=er# =ehicles at cost /$000Vehicle running costs +including depreciation, /8$E00Accumulated depreciation of furniture and

deli=er# Vehicles 82$/009n=entor# at


45/60


-ages and salaries of emplo#ees ;8$800Pro=ision of di=idend /E$000

ates eIpenses $000ate and insurances +prepa#ments, ;/0

ross trading proBt for /010 18$809nterim ordinar# di=idend paid 1/$000!uilding at cost /88$0009n=estment at cost


46/60


"/3 Preparin( Income Statement

,OON C!EUN) $TIncome Statement

For year ene 3 !ece"#er 2010

R

ross trading proBt for /010

18$

809ncome from in=estment /$800*istriution costs

Vehicle running costs +including

depreciation,

+/8$E0

0,Selling costs

Ad=ertising and sales promotions

+


47/60


(o7F08!F A1 Page 8E


48/60


"/5 Preparin( statement of retaine% earnin(

,OON C!EUN) $T

Statement of retaine% earnin(

As at 31 March 2010

R

)et proBt

/$/

Appropriations

&ransfer to general reser=e

10$0

00*i=idends

Preference di=idends

E$00

0Ordinar# di=idends

9nterim

1/$0

00

Final

/0$0

00

Retaine% earnin(s for t8e .ear

1


49/60


"/4 Preparin( statement of Financial position

,OON C!EUN) $TStatement of Financial Position

As at 31 March 2010

R RAssets

#on$current assets

!uilding at cost

/88$0

00

Furniture and deli=er# =ehicles at cost

/$00

0Accumulated depreciation of furniture and

deli=er# =ehicles82$/0

0(arr#ing amount of furniture and deli=er#

=ehicles


50/60


Ordinar# share capital

/00$0

00

Preference share capital

100$0

00

eneral reser=e

;8$00

0

etained earnings cLd/2$88


51/60


C!APTER 5# REPORT ON DARNER COMPANY

AN PEREIRA COMPANY

Report on -nancial statements for (ro'p of compan.

"/" Preparin( consoli%ate% income statement for t8e .ear

en%e% 37 0'ne +7"7

DARNER $T

Consoli%ate% income statement

For the year ene 30 $une 2010RT

000

e=enue


52/60


(o7F08!F A1 Page ;/


53/60


&he di=idends recei=ed #

-arner @td on time of Post

acGuisition

8% ! %#%

*i=idends credited on

consolidated income

statement

8% ; > ;

&

"/+ Preparin( -nancial statements of e'it. c8an(es

DARNER $T

Statement of c8an(es in e'it.

etained earnings

RT

000!alance at 1 Cul# /002


54/60


"/3 Preparin( consoli%ate% balance s8eet for t8e .ear en%e%

37 0'ne +7"7

DARNER $T

Consoli%ate% balance s8eet

As at 30 $une 2010

RT 000 RT 000#on$current assets /$/;0

Propert#$ plant and eGuipmentood7ill 12

/$8


55/60


Notes:

&here 7ere no intercompan# transaction during the #ear so

there 7ill e no deduction from assets and liailities of -arner

@td and Pereira @td.

=" &&&

)oncurrent assets 1$E;0 Q ;00

%,%&

9n=entor# #& : 8&

?&&

ecei=ales %>@ : %#>

8#

(ash #@ : ##%

/22)oncurrent liailities #,&& : #

1$//;(urrent liailities 8&& : %&

;0

ood7ill-arner compan# accounts for preacGuisition di=idends #

treating them as a deduction from the cost of the in=estment.

As calculating ao=e$ a preacGuisition di=idend recei=ed #

-arner @td is =,&&&. Investment in *ereira 'ompany 9 @&&,&&& ; >,&&& 9 =?,&&&

According to the scenario$ the propert#$ plant and eGuipment of

Pereira (ompan# had open mar"et =alue 7as =&&,&&&. -ince no

depreciation ad/ustment will be made in the group accounts, the year end value

will be taken as the carrying value of the property, plant and e1uipment.

&he re=aluation reser=e created in eGuit# of consolidated

alance sheet is:&&,&&& G >&,&&& 9 =#&,&&&

ood7ill 7ill e calculated ased on the net assets 7hich

include retained earnings of preacGuisition.

(o7F08!F A1 Page ;;


56/60


etained earnings for the #ear ended


57/60


Postretained earning #? ! >& ! %#%

@

Fair =alue adHustment #& ! >&

8

)oncontrolling interest

+44

(o7F08!F A1 Page ;E


58/60


CONC$USION

&hrough this report$ it can e seen that the 7a# to prepare Bnancialstatements from complete or incomplete records 7as sho7n clearl#

through three dierent companies. Also$ Bnancial information in

accepted formats for pulication 7ere presented in each case 7ith

clear eIplanation.

9 personall# thin" m# 7or" achie=es good Gualit# ecause 9 pro=ided

important theories$ anal#sis and applications aout e=er# aspects

mentioned in this report. !esides$ 9 also used reliale resources to get

information. %o7e=er$ ecause of 7ord limitation and some other

prolems 9 encountered +summariDing$ anal#Ding s"ills$ etc,$ some

parts in this report could e not thorough and anal#Ded deepl#.

(o7F08!F A1 Page ;


59/60


REFERENCES

AccoutingSimpliBed$ n.d. Accoutin'$(i)pli*ed+co)+ OnlineA=ailale at: http:LLaccountingsimpliBed.comLBnancialLusersof

accountinginformation.html

Accessed 1 )o=emer /01/.

Acs$ n.d. Acs !ducation+ Online

A=ailale at: http:LL777.acs.edu.auLdo7nloadLsamplesLoo"1.pdf


Alunct$ n.d. 7ho needs Bnancial statements. C(! Applied -usiness,

Volume /2$ p.


60/60


eaich$ ).$ /01/. -ied+ Online

A=ailale at: http:LL777.iDed.co.u"LnotesL/01/L0ELintroductionusers

accounts


Valencia$ n.d. alencia Colle'e+ Online

A=ailale at: http:LLfacult#.=alenciacollege.eduLsrussoLch1us.htm

Accessed 1E )o=emer /01/.

-ard$ A.$ /00

Documents

Cow-F04B-FR A1.docx