Financial Reporting

The following trial balance relates to Highwood at 31 March 2011: S'000 $'000 56,000 1,400 35,000 75,000 74,500 10,000 24,500 800 2.600 Equity shares of 50 cents each Retained caminos (note (1 8% converticle on note inate (1) Freehod property - at cost 1 April 2005 (land element $25 million (note in Plant and equipment - at cost Accumulated depreciation - 1 April 2010 - buildings - plant and equipment Current tax (note (iv) Deferred tax (note (iv) Inventory - 4 April 2011 (note () Trace receivables Bank Trace payables Revenue Cost of sales Distribution costs Administrative expenses (note (vi) Loen interest paid (note (10) 36.000 47.00 11,500 24,500 339,650 207.750 27.500 30,700 2,400 500,950 500,950 The following notes are relevant (1) An equity dividend of 5 cents per share was paid in November 2010 and charged to retained earnings (i) The 8% $30 million convertibile: loan note was issued on 1 Aril 2010 at par. Interest is payable annually in arrears on 31 March each year. The loan note is redeemable at par on 31 March 2013 or convertible into equity shares at the option of the loan nate holders on the basis of 30 equity shares for each $100 of loan note Highwood's finance director has calculated that to issue an equivalent loan rota without the conversion rights it would have to pay an interest rate of 10% per annum to attract investors. The present value of $1 receivable at the end of each year, based on discount rates of 8% and 10% are: B% 10% End of year 1 0.93 0.91 2 0-86 0.83 0.79 0.75 (iii) Non-current sels: On 1 April 2010 Highwood decided for the first time to value its freshold property at its current value. A qualified property valuer reported that the market value of the frochold property on this date was $30 million, of which $30 million related to the land, M this date the remaining estimated life of the property was 20 years. Highwood does not make a transfer to retained eamings in respect of excess depreciation on the revaluation of its assets Plant is depreciated at 20% per annum on the reducing balance method, All depreciation of non-current assets is charged kael of sales. (iv) The balance on current tax represents the under over provision of the tax liability for the year ended 31 March 2010. The required provision for income tax for the year ended 31 March 2011 is $19.4 million. The difference between the carrying amounts of the net assets of Highwood (including the evaluation of the property in note above) and their wer) tax base at 31 March 2011 is $27 million. Highwood's rate of income tax is 25% M The inventory of Highwood was not counted until 4 April 2011 cue to operational reasors. At this date its value at cost was 26 million and this figure has been used in the act of sales calculation above. Between the year end of 31 March 2013 and 4 April 2011, Highwace received a ceivery of goods at a cost of $27 million and made sales of $7 million at a maric-up an cost of 30%. Neither the goods delivered nor the sales made in this period were included in Highwood's purchases (as part of cost of sales) or revenue in the above trial balance. (vi) On 31 March 2011 Highwad lectures isod trade recevables with a book value of $10 million to Easylir. Highwood received an immediate payment of 98.7 million and will pay Casytirence 2% per month on any uncollected balance. Any of the factores receivables outstanding atter six months will be refunded to Easylinance. Highwood has derecognised the receivables and charped $1.3 million to administrative cxpenses If Highwood lanolfactored these recevables it would have made an allowance of $600,Con against them. Required: (1) Prepare the statement of comprehensive income for Highwood for the year ended 31 March 2011; (ii) Prepare the statement of changes in equity for Highwood for the year ended 31 March 2011; (III) Prepare the statement of financial position of Highwood as at 31 March 2011. Note: your answers and workings should be presented to the nearest S1,000; notes to the financial statements are not required. III The following trial balance relates to Highwood at 31 March 2011: S'000 $'000 56,000 1,400 35,000 75,000 74,500 10,000 24,500 800 2.600 Equity shares of 50 cents each Retained caminos (note (1 8% converticle on note inate (1) Freehod property - at cost 1 April 2005 (land element $25 million (note in Plant and equipment - at cost Accumulated depreciation - 1 April 2010 - buildings - plant and equipment Current tax (note (iv) Deferred tax (note (iv) Inventory - 4 April 2011 (note () Trace receivables Bank Trace payables Revenue Cost of sales Distribution costs Administrative expenses (note (vi) Loen interest paid (note (10) 36.000 47.00 11,500 24,500 339,650 207.750 27.500 30,700 2,400 500,950 500,950 The following notes are relevant (1) An equity dividend of 5 cents per share was paid in November 2010 and charged to retained earnings (i) The 8% $30 million convertibile: loan note was issued on 1 Aril 2010 at par. Interest is payable annually in arrears on 31 March each year. The loan note is redeemable at par on 31 March 2013 or convertible into equity shares at the option of the loan nate holders on the basis of 30 equity shares for each $100 of loan note Highwood's finance director has calculated that to issue an equivalent loan rota without the conversion rights it would have to pay an interest rate of 10% per annum to attract investors. The present value of $1 receivable at the end of each year, based on discount rates of 8% and 10% are: B% 10% End of year 1 0.93 0.91 2 0-86 0.83 0.79 0.75 (iii) Non-current sels: On 1 April 2010 Highwood decided for the first time to value its freshold property at its current value. A qualified property valuer reported that the market value of the frochold property on this date was $30 million, of which $30 million related to the land, M this date the remaining estimated life of the property was 20 years. Highwood does not make a transfer to retained eamings in respect of excess depreciation on the revaluation of its assets Plant is depreciated at 20% per annum on the reducing balance method, All depreciation of non-current assets is charged kael of sales. (iv) The balance on current tax represents the under over provision of the tax liability for the year ended 31 March 2010. The required provision for income tax for the year ended 31 March 2011 is $19.4 million. The difference between the carrying amounts of the net assets of Highwood (including the evaluation of the property in note above) and their wer) tax base at 31 March 2011 is $27 million. Highwood's rate of income tax is 25% M The inventory of Highwood was not counted until 4 April 2011 cue to operational reasors. At this date its value at cost was 26 million and this figure has been used in the act of sales calculation above. Between the year end of 31 March 2013 and 4 April 2011, Highwace received a ceivery of goods at a cost of $27 million and made sales of $7 million at a maric-up an cost of 30%. Neither the goods delivered nor the sales made in this period were included in Highwood's purchases (as part of cost of sales) or revenue in the above trial balance. (vi) On 31 March 2011 Highwad lectures isod trade recevables with a book value of $10 million to Easylir. Highwood received an immediate payment of 98.7 million and will pay Casytirence 2% per month on any uncollected balance. Any of the factores receivables outstanding atter six months will be refunded to Easylinance. Highwood has derecognised the receivables and charped $1.3 million to administrative cxpenses If Highwood lanolfactored these recevables it would have made an allowance of $600,Con against them. Required: (1) Prepare the statement of comprehensive income for Highwood for the year ended 31 March 2011; (ii) Prepare the statement of changes in equity for Highwood for the year ended 31 March 2011; (III) Prepare the statement of financial position of Highwood as at 31 March 2011. Note: your answers and workings should be presented to the nearest S1,000; notes to the financial statements are not required