Paragon Ltd commenced operations on 1 October, 2020 by issuing 150,000 $5.00 shares payable in full on application. By 31 October 2020 the shares were fully subscribed and duly allotted. There were no share issue costs. No additional shares were issued during the financial year ending 30 June 2021. For the year ending 30 June 2022, the company recorded the following aggregate transactions:

Accounts	$000
Sales	4150
Interest income	6
Gain on sale of trading securities	50
Cost of sales	2000
Selling and distributions expenses	340
Employee entitlement expenses	10
Wages and salaries	250
Rent expense	110
Depreciation expense	?
Insurance expense	90
Doubtful debt expense	16
Interest expense	60
Borrowing expenses	15
Other expenses	20
Income tax expense	296

The following additional information was noted during the preparation of the financial statements for the year ended 30 June 2022

An additional 30,000 $5.00 shares have been issued and fully paid on 1 July 2021.

Sales and distribution expenses include sales and marketing expenses $110 000 and distribution expenses $230,000

. $54,000 dividends were declared and paid during the 2022 financial year, consisting of an interim dividend at 10 cents per share and a final dividend of 20 cents per share

. Inventory is measured at the lower of cost and net realisable value.

Buildings, Plant and equipment were measured at cost.

Land was measured at fair value. The following revaluation was recognised during the year ended 30 June 2022 (included in year end balances): land revalued upward by $60,000 (related income tax $15,000, valuation by the registered valuer, XYZ Valuers Co.).

Financial assets held for trading are equity investments held for the purpose of selling and short-term profit taking (this point relates to the gain: hint recognise in P&L).

$50,000 of bank loans is repayable within 1 year.

$20,000 of other loans is repayable within 1 year.

The provision for employee benefits includes $30,000 payable within 1 year.

The warranty provision is in respect of a 12-month warranty given on certain goods sold.

Summarised year end balances are provided below:

Year-end balances, 30 June 2022	$000
Cash on hand	100
Cash on deposit, at call	60
Trade debtors	205
Allowance for doubtful debts	30
Other debtors	170
Work in progress inventories	480
Finished goods inventories	390
Land	800
Buildings	960
Accumulated depreciation buildings	?
Plant and Equipment machinery	820
Accumulated deprecations machinery	?
Bank loans	510
Other loans	400
Trade creditors	462
Provision for employee benefits	180
Income tax payable	145
Warranty provision	90
Deferred tax liability	140
Revaluation surplus, net of tax	45
Share Capital, 30 June 2021	750
Retained earnings, 30 June 2021	54

Further information regarding Paragon Ltds Buildings, Plant and Equipment:

Assets acquired on 1 October 2020. Assets depreciated on a straight-line basis.

Buildings cost $960,000 and have an estimated useful life of 30 years with nil residual value.

Plant and Equipment cost $820,000 and have an estimated useful life of 10 years and residual value of $20,000.

Round any calculations to whole dollars.

Required: For the year ending 30 June, 2022 (NOTE: comparative financial statements are not required),

1. Using the pro forma table supplied in appendix B, prepare a preliminary trial balance for Paragon Ltd; (6 Marks)

2. Prepare a statement of comprehensive income for Paragon Ltd in accordance with the requirements of AASB 101. Paragon 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; (6 marks)

3. Prepare a statement of changes in equity for Paragon Ltd in accordance with the requirements of AASB 101; (6 marks) 4. Prepare a statement of financial position for Paragon Ltd in accordance with AASB 101. Use the current/non-current presentation format; (6 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): (10 marks).

Appendix B

Paragon Ltd- Trial Balance as at 30 June 2022	DR	CR
	$000	$000
Sales of goods
Interest income
Gain from trading securities
Cost of sales
Sales and Distribution expenses
Employee entitlement expenses
Wages and salaries
Rent expense
Depreciation expense
Insurance expense
Doubtful debt expense
Interest expense
Borrowing expenses
Other expenses
Income tax expense
Cash on hand
Cash on deposit, at call
Trade debtors
Allowance for doubtful debts
Other debtors
Work in progress inventories
Finished goods inventories
Land
Buildings
Accumulated depreciation-buildings
Plant and equipment
Accumulated depreciation plant and equipment
Trade creditors
Bank loans
Other loans
Provision for employee benefits
Income tax payable
Warranty provision
Deferred tax liability
Share capital