Financial statement presentation

You are the senior financial accountant at Blake Ltd. One of the new trainee accountants has prepared the following statement of profit or loss and other comprehensive income and statement financial position from the trial balance, after its first year of operations:

Additional information:

Blake Ltd uses the single statement format for the statement of profit or loss and other comprehensive income and presents an analysis of expenses by function on the statement.

In relation to the statement of financial position, where AASB 101 requires entities to disclose further sub-classifications of the minimum line items on the face of the statement or in the notes, the directors of Blake Ltd want to report only the minimum line items on the face of the statement, and leave the sub-classifications to be disclosed in the notes.

Required:

Review the financial statements prepared by the trainee accountant. Discuss what corrections / changes need to be made to the financial statements, to ensure that they comply with the requirements of AASB 101. Provide references to relevant paragraphs in the accounting standards where appropriate to support your answers. Note: You are not required to discuss any note disclosures that are needed, or prepare revised financial statements.

Blake Ltd Statement of financial position as at 30 June 2017 5000 Assets 115 190 12 24 Cash at bank Receivables andiventory Raw materials Work in progress Prepaid insurance Property, plant, equipmentand intangible assets Patents Cash management account Totalassets 428 40 160 982 Accounts payable and provision for warranty Allowance fordoubtful debts Accumulated depreciation-property, plant and equipment Borowings Debentures Current and deferredtax liabilities Provision forannual leave Total liablities 80 48 150 50 174 Net assets Equity Share capital- ordinary shares Total equity 50 1 557 Blake Ltd Statement of financial position as at 30 June 2017 5000 Assets 115 190 12 24 Cash at bank Receivables andiventory Raw materials Work in progress Prepaid insurance Property, plant, equipmentand intangible assets Patents Cash management account Totalassets 428 40 160 982 Accounts payable and provision for warranty Allowance fordoubtful debts Accumulated depreciation-property, plant and equipment Borowings Debentures Current and deferredtax liabilities Provision forannual leave Total liablities 80 48 150 50 174 Net assets Equity Share capital- ordinary shares Total equity 50 1 557