QUESTION 2 (11 MARKS) The following trial balance information relates to Dilly Sun Pty Ltd at June 30, 2022 before adjustments to the valuation of certain assets: Account Cash at bank Receivables Share Capital - ordinary shares full paid - 2,000,000 Accounts payable Provision for long service leave General reserve Allowance for doubtful debts Plant and equipment at cost Accumulated depreciation - plant and equipment Land - at cost Buildings - at cost Accumulated depreciation - buildings Goodwill at cost Accumulated impairment - goodwill Shares in Williams Ltd -at cost 7% unsecured notes in Williams Ltd - cost $500,000 Inventories Prepaid insurance Prepaid rent Other reserve (used for Available for sale assets) Current tax payable Retained earnings - 30/06/2020 Dividend payable Debit Credit 11,000 265,000 1,150,000 295,000 15,000 350,000 10,000 150,000 15,000 110,000 500,000 75,000 150,000 50,000 365,000 550,000 425,000 3,000 2,000 50,000 136,000 200,000 185,000 2,341,000 2,721,000 Additional information: Net profit after tax $50,000 is included in the retained earnings Impairment testing of goodwill determined that a loss of $25,000 was recognized in the above figures. Long service leave expected to be taken within the next 12 months is $5,000 Inventories comprise: Raw materials at cost $50,000 Work in progress at cost 25,000 Finished goods at cost Finished goods at net realisable value Total 250,000 100,000 425,000 The following items are yet to be recorded in the accounts: Land at directors' valuation June 30, 2022- to $125,000, this difference to be accounted for in the Asset revaluation reserve Buildings at directors' valuation June 30, 2022- to $750,000, this difference to be accounted for in the Asset revaluation reserve Shares in Williams Ltd have a value on the Stock Exchange at June 30, 2020 of $400,000. These shares are "available for sale investments. This increase to be accounted for in 'other reserves. . 7% unsecured notes in Williams Ltd are listed on the stock exchange and have a market value of $535,000 at June 30, 2022. The notes are "available for sale" investments. The decrease to be accounted for in 'c{ther reserves No new shares were issued during the year. Ignore any tax effect on revaluations. Required: 1. The Trial balance for the business is not in balance. You are to identify the errors and prepare the updated balanced trial balance. (1 Mark) 2. Prepare the Statement of Financial Position and the notes to the Statement of Financial position for the period ending June 30, 2022 in accordance with AASB112 (10Marks) Dilly Sun Pty Ltd Trial Balance as at 30 June 2022 Account Cash at bank Receivables Share Capital - ordinary shares full paid 2,000,000 Accounts payable Provision for long service leave General reserve Allowance for doubtful debts Plant and equipment at cost Accumulated depreciation - plant and equipment Land at cost Buildings - at cost Accumulated depreciation - buildings Goodwill at cost Accumulated impairment - goodwill Shares in Williams Ltd - at cost 7% unsecured notes in Williams Ltd - cost $500,000 Inventories Prepaid insurance Prepaid rent Other reserve (used for Available for sale assets) Current tax payable Retained earnings - 30/06/2021 Dividend payable Debit Credit 11,000 265,000 1,150,000 295,000 15,000 350,000 10,000 150,000 15,000 110,000 500,000 75,000 150,000 50,000 365,000 550,000 425,000 3,000 2,000 50,000 136,000 200,000 185,000 2,341,000 2,721,000 Statement of Financial Position of Dilly Sun Pty Ltd as at 30 June 2022 ASSETS Note $ $ Current Assets Non Current Assets Total Assets LIABILITIES Current Liabilities Non Current Liabilities NET ASSETS EQUITY TOTAL EQUITY Notes to Statement of Financial Position 1. Cash and cash equivalents 2. Trade and other receivables 3. Inventories 4. Other current assets 5. Property, plant and equipment 6. Available for sale investments 7. Goodwill 8. Liabilities 9. Reserves 10. Asset Revaluation reserve QUESTION 2B.(1.5 marks) i. What is the objective of producing general purpose financial reports? ii. What are the ethical requirements relating to financial reporting? iii. What is the accounting standard that covers the presentation of financial reports? QUESTION 3 (2.5 MARKS) Statement of Equity The following information applies to Casey for the year ended June 30, 2022 Debit Balance of account at 1 July 2021 Asset revaluation reserve Dividend reserve General reserve Share Capital - ordinary shares Share Capital - preference shares Retained earnings Credit 250,000 15,000 5,000 100,000 100,000 120,000 Additional information for the year ending June 30, 2022 Share capital consists of 100,000 ordinary shares; and 50,000 preference shares QUESTION 2 (11 MARKS) The following trial balance information relates to Dilly Sun Pty Ltd at June 30, 2022 before adjustments to the valuation of certain assets: Account Cash at bank Receivables Share Capital - ordinary shares full paid - 2,000,000 Accounts payable Provision for long service leave General reserve Allowance for doubtful debts Plant and equipment at cost Accumulated depreciation - plant and equipment Land - at cost Buildings - at cost Accumulated depreciation - buildings Goodwill at cost Accumulated impairment - goodwill Shares in Williams Ltd -at cost 7% unsecured notes in Williams Ltd - cost $500,000 Inventories Prepaid insurance Prepaid rent Other reserve (used for Available for sale assets) Current tax payable Retained earnings - 30/06/2020 Dividend payable Debit Credit 11,000 265,000 1,150,000 295,000 15,000 350,000 10,000 150,000 15,000 110,000 500,000 75,000 150,000 50,000 365,000 550,000 425,000 3,000 2,000 50,000 136,000 200,000 185,000 2,341,000 2,721,000 Additional information: Net profit after tax $50,000 is included in the retained earnings Impairment testing of goodwill determined that a loss of $25,000 was recognized in the above figures. Long service leave expected to be taken within the next 12 months is $5,000 Inventories comprise: Raw materials at cost $50,000 Work in progress at cost 25,000 Finished goods at cost Finished goods at net realisable value Total 250,000 100,000 425,000 The following items are yet to be recorded in the accounts: Land at directors' valuation June 30, 2022- to $125,000, this difference to be accounted for in the Asset revaluation reserve Buildings at directors' valuation June 30, 2022- to $750,000, this difference to be accounted for in the Asset revaluation reserve Shares in Williams Ltd have a value on the Stock Exchange at June 30, 2020 of $400,000. These shares are "available for sale investments. This increase to be accounted for in 'other reserves. . 7% unsecured notes in Williams Ltd are listed on the stock exchange and have a market value of $535,000 at June 30, 2022. The notes are "available for sale" investments. The decrease to be accounted for in 'c{ther reserves No new shares were issued during the year. Ignore any tax effect on revaluations. Required: 1. The Trial balance for the business is not in balance. You are to identify the errors and prepare the updated balanced trial balance. (1 Mark) 2. Prepare the Statement of Financial Position and the notes to the Statement of Financial position for the period ending June 30, 2022 in accordance with AASB112 (10Marks) Dilly Sun Pty Ltd Trial Balance as at 30 June 2022 Account Cash at bank Receivables Share Capital - ordinary shares full paid 2,000,000 Accounts payable Provision for long service leave General reserve Allowance for doubtful debts Plant and equipment at cost Accumulated depreciation - plant and equipment Land at cost Buildings - at cost Accumulated depreciation - buildings Goodwill at cost Accumulated impairment - goodwill Shares in Williams Ltd - at cost 7% unsecured notes in Williams Ltd - cost $500,000 Inventories Prepaid insurance Prepaid rent Other reserve (used for Available for sale assets) Current tax payable Retained earnings - 30/06/2021 Dividend payable Debit Credit 11,000 265,000 1,150,000 295,000 15,000 350,000 10,000 150,000 15,000 110,000 500,000 75,000 150,000 50,000 365,000 550,000 425,000 3,000 2,000 50,000 136,000 200,000 185,000 2,341,000 2,721,000 Statement of Financial Position of Dilly Sun Pty Ltd as at 30 June 2022 ASSETS Note $ $ Current Assets Non Current Assets Total Assets LIABILITIES Current Liabilities Non Current Liabilities NET ASSETS EQUITY TOTAL EQUITY Notes to Statement of Financial Position 1. Cash and cash equivalents 2. Trade and other receivables 3. Inventories 4. Other current assets 5. Property, plant and equipment 6. Available for sale investments 7. Goodwill 8. Liabilities 9. Reserves 10. Asset Revaluation reserve QUESTION 2B.(1.5 marks) i. What is the objective of producing general purpose financial reports? ii. What are the ethical requirements relating to financial reporting? iii. What is the accounting standard that covers the presentation of financial reports? QUESTION 3 (2.5 MARKS) Statement of Equity The following information applies to Casey for the year ended June 30, 2022 Debit Balance of account at 1 July 2021 Asset revaluation reserve Dividend reserve General reserve Share Capital - ordinary shares Share Capital - preference shares Retained earnings Credit 250,000 15,000 5,000 100,000 100,000 120,000 Additional information for the year ending June 30, 2022 Share capital consists of 100,000 ordinary shares; and 50,000 preference shares