6 395 000 4 419 000 6000 8 000 22 000 100 000 36 000 54 000 932 000 58 000 7000 30 000 12 000 268 000 PART B Newcastle Ltd, has been manufacturing and selling swimming suits for men and women for the last two years. The company commenced its operations on 1 July 2018 by issuing 350 000, S5 shares fully paid. There was no other cost related to the share issue. For the year ending 30 June 2020, the company recorded the following aggregate transactions: Accounts Sales (90% credit and 10% cash sales) Cost of Sales Interest income Rent Revenue Gain on sale of plant Employee benefit expenses - Admin Utilities expenses (1/3 selling & 2/3 admin) Depreciation expense- Admin Selling & Distribution Expenses Insurance expense - Admin Doubtful debts expense Interest expense Other borrowing expenses Income tax expense The following additional information was noted during the preparation of financial statements for the year ended 30 June 2020: Additional 80 000 @ $5 fully paid shares were issued On 1 July 2019. A cash dividend of S180 000 was declared and paid during the 2020 financial year and a final dividend for 2020 of S75 000 was proposed but not recognised in the financial statements. Inventory was measured at the lower of cost and net realizable value. Buildings, plant and equipment were measured at cost. The benefits were expected to be received evenly over the useful life of the asset. Land was revalued upward by $100 000 (related income tax for this transaction was $30 000). The revaluation gain will not be reclassified and has been recorded in the 'Land Revaluation Surplus'. The valuation was conducted by the registered valuer, Abbey Valuations Pty Ltd. Financial assets held for trading are equity investments that are held for the purpose of selling and short-term profit taking, $127 000 of other loans are repayable within six months. The remaining amount is payable in full at the end of 2022 $30 000 of bank loans are repayable within one year. The remaining amount is payable in full at the end of 2024 The provision for employee benefits includes $47 000 payable within one year. The warranty provision is in respect of a 12-month warranty given on certain goods sold 2 The bank loan is for 5 years and repayable in full at the end of the term. The interest rate is 9% and it is secured over the land. Newcastle Ltd uses the single statement format for the statement of profit or loss and other comprehensive income and classifies expenses by function within the statement. Summarised account balances are provided below: Year-end balances, 30 June 2020 Cash on Hand Bank Bank Overdraft Trade receivable Allowance for doubtful debts Other receivables Inventories Prepaid insurance Financial assets held for trading Plant and equipment Accumulated depreciation - plant and equipment Land Buildings Accumulated depreciation - buildings Patents Accumulated amortisation of patent Furniture Accumulated depreciation - furniture Goodwill Trade payable Provision for employee benefits Provision for warranty Bank loans Other loans Share Capital Retained earnings, 30 June 2019 Dividends paid Land revaluation surplus Current tax liability Deferred tax asset 22 000 450 000 86 000 969 000 12 000 70 000 900 000 2000 215 000 1 350 000 495 000 416 000 132 000 40 000 46 000 5 000 33 000 10 000 910 000 535 000 88 000 67 000 110 000 527 000 2 150 000 796 000 180 000 228 000 65 000 34 000 Required: For the year ending 30 June 2020 (Note: comparative financial statements are not required), 1. Using the pro forma table supplied in appendix B, prepare a preliminary trial balance for Newcastle Ltd; (5 Marks) 2. Prepare a statement of comprehensive income for Newcastle Ltd in accordance with the requirements of AASB 101. Newcastle Ltd uses the single statement format for the statement of profit or loss and other comprehensive income and classifies expenses by function within the statement; (15 marks) 3. Prepare a statement of changes in equity for Newcastle Ltd in accordance with the requirements of AASB 101; (8 marks) 4. Prepare a statement of financial position for Newcastle Ltd in accordance with AASB 101. Use the currenton-current presentation format; (12 marks) 5. Prepare appropriate notes to the accounts. (You do not need to prepare notes related to income taxes. Include the following note as note 1. You may optionally add accounting policies to this note): (20 marks). "1. Summary of significant accounting policies Basis of accounting The financial report is a general-purpose financial report which has been prepared on the historical cost basis, except where stated otherwise. Statement of Compliance The financial statements have been prepared in accordance with the requirements of the Corporations Act, Australian Accounting Standards which include Australian equivalents to International Financial Reporting Standards (AIFRSs) and AASB Interpretations. Compliance with AIFRSs ensures the financial statements and notes comply with International Financial Reporting Standards 6. After preparing and analysing the Newcastle Ltd.'s financial statements, prepare a brief report (no more than 500 words) for the CEO explaining the company's financial performance and position. (5 marks) 7. Many investors as well as public are now concerned about organisation's social and environmental impacts. Therefore, more and more organisations are now providing various social and environmental information. Tahlia has asked you to identify what types of social and environmental information Newcastle Itd should provide to their stakeholders? Identify five important types of social and environment information/indicators (such as "Total amount of GHG emissions") related Newcastle Ltd and explain briefly the reason for selecting each of them (no more than 500 words). (5 marks). 6 395 000 4 419 000 6000 8 000 22 000 100 000 36 000 54 000 932 000 58 000 7000 30 000 12 000 268 000 PART B Newcastle Ltd, has been manufacturing and selling swimming suits for men and women for the last two years. The company commenced its operations on 1 July 2018 by issuing 350 000, S5 shares fully paid. There was no other cost related to the share issue. For the year ending 30 June 2020, the company recorded the following aggregate transactions: Accounts Sales (90% credit and 10% cash sales) Cost of Sales Interest income Rent Revenue Gain on sale of plant Employee benefit expenses - Admin Utilities expenses (1/3 selling & 2/3 admin) Depreciation expense- Admin Selling & Distribution Expenses Insurance expense - Admin Doubtful debts expense Interest expense Other borrowing expenses Income tax expense The following additional information was noted during the preparation of financial statements for the year ended 30 June 2020: Additional 80 000 @ $5 fully paid shares were issued On 1 July 2019. A cash dividend of S180 000 was declared and paid during the 2020 financial year and a final dividend for 2020 of S75 000 was proposed but not recognised in the financial statements. Inventory was measured at the lower of cost and net realizable value. Buildings, plant and equipment were measured at cost. The benefits were expected to be received evenly over the useful life of the asset. Land was revalued upward by $100 000 (related income tax for this transaction was $30 000). The revaluation gain will not be reclassified and has been recorded in the 'Land Revaluation Surplus'. The valuation was conducted by the registered valuer, Abbey Valuations Pty Ltd. Financial assets held for trading are equity investments that are held for the purpose of selling and short-term profit taking, $127 000 of other loans are repayable within six months. The remaining amount is payable in full at the end of 2022 $30 000 of bank loans are repayable within one year. The remaining amount is payable in full at the end of 2024 The provision for employee benefits includes $47 000 payable within one year. The warranty provision is in respect of a 12-month warranty given on certain goods sold 2 The bank loan is for 5 years and repayable in full at the end of the term. The interest rate is 9% and it is secured over the land. Newcastle Ltd uses the single statement format for the statement of profit or loss and other comprehensive income and classifies expenses by function within the statement. Summarised account balances are provided below: Year-end balances, 30 June 2020 Cash on Hand Bank Bank Overdraft Trade receivable Allowance for doubtful debts Other receivables Inventories Prepaid insurance Financial assets held for trading Plant and equipment Accumulated depreciation - plant and equipment Land Buildings Accumulated depreciation - buildings Patents Accumulated amortisation of patent Furniture Accumulated depreciation - furniture Goodwill Trade payable Provision for employee benefits Provision for warranty Bank loans Other loans Share Capital Retained earnings, 30 June 2019 Dividends paid Land revaluation surplus Current tax liability Deferred tax asset 22 000 450 000 86 000 969 000 12 000 70 000 900 000 2000 215 000 1 350 000 495 000 416 000 132 000 40 000 46 000 5 000 33 000 10 000 910 000 535 000 88 000 67 000 110 000 527 000 2 150 000 796 000 180 000 228 000 65 000 34 000 Required: For the year ending 30 June 2020 (Note: comparative financial statements are not required), 1. Using the pro forma table supplied in appendix B, prepare a preliminary trial balance for Newcastle Ltd; (5 Marks) 2. Prepare a statement of comprehensive income for Newcastle Ltd in accordance with the requirements of AASB 101. Newcastle Ltd uses the single statement format for the statement of profit or loss and other comprehensive income and classifies expenses by function within the statement; (15 marks) 3. Prepare a statement of changes in equity for Newcastle Ltd in accordance with the requirements of AASB 101; (8 marks) 4. Prepare a statement of financial position for Newcastle Ltd in accordance with AASB 101. Use the currenton-current presentation format; (12 marks) 5. Prepare appropriate notes to the accounts. (You do not need to prepare notes related to income taxes. Include the following note as note 1. You may optionally add accounting policies to this note): (20 marks). "1. Summary of significant accounting policies Basis of accounting The financial report is a general-purpose financial report which has been prepared on the historical cost basis, except where stated otherwise. Statement of Compliance The financial statements have been prepared in accordance with the requirements of the Corporations Act, Australian Accounting Standards which include Australian equivalents to International Financial Reporting Standards (AIFRSs) and AASB Interpretations. Compliance with AIFRSs ensures the financial statements and notes comply with International Financial Reporting Standards 6. After preparing and analysing the Newcastle Ltd.'s financial statements, prepare a brief report (no more than 500 words) for the CEO explaining the company's financial performance and position. (5 marks) 7. Many investors as well as public are now concerned about organisation's social and environmental impacts. Therefore, more and more organisations are now providing various social and environmental information. Tahlia has asked you to identify what types of social and environmental information Newcastle Itd should provide to their stakeholders? Identify five important types of social and environment information/indicators (such as "Total amount of GHG emissions") related Newcastle Ltd and explain briefly the reason for selecting each of them (no more than 500 words)