PART B Question 3 (12 marks in total) Recommended time allowance: 15 minutes The general ledger trial balance of Magpie Ltd includes the following accounts at 30 June 2019. (a) Sales revenue (b) Interest revenue (c) Prepaid insurance (d) Gain on sale of plant and equipment (e) Cost of sales (1) Finance expenses (g) Accrued wages (h) Selling and distribution costs (1) Administrative expenses () Income tax expenses (k) Deferred tax liability (1) Gain on land revaluation $950 000 25 000 8 000 10 000 600 000 15 000 20 000 50 000 30 000 75 000 15 000 20 000 Additional information Magpie Ltd uses the single statement format and classifies expenses by function. The land was purchased on 1 July 2018 and revalued for the first time on 30 June 2019. Required Using the above information, a junior accountant has prepared the following statement for Magpie Ltd. You are required to review this statement, identify and explain what errors (if any) have been made, and how each should be rectified. Please identify each error separately in the space provided on the next page. However, you will not be penalised if you happen to combine a couple that may be related or describe two aspects together. Magpie Ltd Statement of Profit and Loss and Other Comprehensive Income As at 30 June 2019 950 35 20 (600) (50) (30) Revenue Other income Gain on land revaluation Cost of sales Selling and distributions expenses Administrative expenses Accrued wages Finance costs Profit before tax Deferred tax liability Income tax expense Profit for the year (20) (15) 290 (15) (75) 200