SG Ltd has Prepared its Draft Trial Balance to 30 June 2020, Which is Shown below Trial Balance as at 30 June 2020 : Accounting and Finance Coursework, UOS, Singapore

SG Ltd has prepared its draft trial balance to 30 June 2020, which is shown below.

Trial Balance as at 30 June 2020

The following information is available:

a. The authorized share capital is 4,000,000 9% preference shares of $1 each and 18,000,000 ordinary shares of $0.50 each.

b. Provide for depreciation at the following rates:

• Plant and machinery 20% on the cost
• Fixtures and fittings 10% on the cost
• Buildings 2% on the cost

Charge all depreciation to cost of sales.

c. Provide $5,348,000 for income tax.

d. The loan was raised during the year and there is no outstanding interest accrued at the year-end.

e. Government grants of $85,000 have been received in respect of plants purchased during the year and are shown in the trial balance. One-fifth is to be taken into profit in the current year.

f. During the year a fire took place at one of the company’s depots, involving losses of $200,000. These losses have already been written off to the cost of sales shown in the trial balance.

Since the end of the financial year, a settlement of $150,000 has been agreed upon with the company’s insurers.

g. $500,000 of the inventory is obsolete. This has a realizable value of $250,000.

h. Acquisitions of property, plant, and equipment during the year were:

Fixtures $144,000

i. During the year freehold land which cost $720,000 was sold for $1,316,000.

j. A final ordinary dividend of $0.03 per share is declared and was an obligation before the year-end, together with the balance of the preference dividend. Neither dividend was paid at the year-end.

k. The goodwill has not been impaired.

l.The land was revalued at the year-end at $2,500,000.

Required:

1. Prepare the company’s statement of comprehensive income for the year to 30 June 20X1 and a statement of financial position as at that date, complying with the relevant accounting standards in so far as the information given permits. (All calculations to nearest $000.)

2. Explain the usefulness of the schedule prepared in (1).

3. IAS 1 Presentation of Financial Statements requires ‘other comprehensive income’ items to be included in the statement of comprehensive income and it also requires a statement of changes in equity. Explain the need for publishing this information, and identify the items you would include in them.