Section 1 Presentation of financial statements (10 MARKS)

The adjusted trial balance of Timber Ltd as at 30 June 2017 is as follows:
Timber Ltd	Debit	Credit
	$	$
Account names
5% debentures due 30/11/2017(secured over inventories)		60,000
Accounts payable		447,000
Accounts receivable	850,000
Accumulated amortisation patents & trademarks		45,000
Accumulated depreciation -
Accumulated impairment loss goodwill		210,000
Administrative staff salaries expense	590,000
Advertising expense	70,000
Allowance for doubtful debts		71,500
Asset Revaluation Reserve - Held to maturity investment (revaluation increment on 30/06/2017 after tax deduction)		21,000
Asset Revaluation Reserve - Land (revaluation increment on 30 June 2017 - after tax deduction)		168,000
Bank loan (unsecured long-term repayable amount)		210,000
Bank loan (unsecured short-term repayable due)		90,000
Buildings		90,000
Buildings	1,100,000
Carrying amount of plant and machinery sold	24,000
Cash at bank	800,000
Cost of sales	2,924,000
Current tax liabilities		141,000
Debentures held in Rome Ltd (mature on 30/4/2018)	714,000
Deferred tax asset	190,000
Deferred tax liability		103,000
Deposits at call	100,000
Dividends receivable	8,000
Dividends revenue		68,000
Final dividend declared ord	145,360
Final dividend declared - pref	45,300
Final dividend payable		190,660
Fixtures & fittings		97,000
Fixtures & fittings - at cost	243,520
Freight inwards	90,000
Freight outwards	115,000
General reserve		780,000
Goodwill	832,000
Held to maturity investment (at fair value)	145,000
Income tax expense	401,000
Interest expense	74,000
Interest payable		19,000
Interest revenue		30,000
Interim dividend paid - ord	109,020
Inventories	1,850,000
Land (at fair value)	1,476,000
Loan to Jets Ltd (due on 30/6/2025)	420,000
Mortgage loan (secured over land and buildings due 30/9/2022)		504,000
Ordinary shares, fully paid		3,634,000
Other administrative expense	360,000
Other expenses	137,000
Other selling expense	220,000
Patents and trademarks	145,000
Plant & machinery		226,000
Plant & machinery - at cost	884,000
Preference shares, fully paid		226,500
Prepayments	50,000
Proceeds on sale of plant and machinery		50,000
Provision for annual leave		62,000
Provision for long service leave - long term liable		134,000
Provision for long service leave -short term liable		85,000
Retained earnings as at 1/7/2016		850,000
Sales returns	32,000
Sales revenue		6,968,340
Sales staff salaries and commission expense	750,000
Sundry revenue		46,200
Total Asset revaluation reserve as at 1/7/2016		364,000
Transfer to general reserve	60,000
Underwriting commission and other share issue costs	37,000
Total	15,991,200	15,991,200

Prepare a statement of profit or loss and other comprehensive income for Timber Ltd for the year ended 30 June 2017 (classify expenses by functions). Cross reference all workings

Timber Ltd
Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30/06/2017
	Reference #
Revenue
Cost of sales
Gross profit
Other revenue
Other income (loss)
Selling expenses
Administrative expenses
Other expenses
Finance costs
Profit before income tax
Income tax expense
Profit for the period
Other comprehensive income:
Items that will not be reclassified to profit or loss
Gain arising during the year on revaluation of land
Gain arising during the year on investments in equity instruments
Income tax relating to items not reclassified
Other comprehensive income during the year, net of tax
Total comprehensive income for the year