Sydney Ltd, commenced retail operations on 1 July 2019 by issuing 1,000,000 shares at @ $1.00 per share, payable in full on application. Company sales designer's leather bags to customers. There were no share issue costs. For the year ending 30 June 2021, the company recorded the following balances:

• Sales revenue $1,350,000 (Sales price: $1,500 each bag)
• Gain from trading securities $20,000
• Cost of sales: need to be calculated (Cost: $1,000 each bag)
• Wages and salaries (administrative) $80,000
• Wages and salaries (selling) $100,000
• Office Rent $20,000
• Advertising and distribution expense $10,000
• Utility bills $4,000
• Sales commission expense (sales employee) $28,000
• Bad debt expense $8,000
• Depreciation expense Furniture? (need to be calculated)
• Depreciation expense Building? (need to be calculated)
• Interest expense $40,000
• Bank charge $10,000
• Income tax expense $46,000

Summarised account balances for the equity section at the end of the prior financial year (i.e., 2020) are provided below:

Year-end balances, 30 June 2020	$
Share Capital, 30 June 2020	1,000,000
Retained earnings, 30 June 2020	95,000

In the current year-

• Additional shares were issued and fully paid on the following dates during the 2021 financial year:

1 Jan 2021: 40 000 ordinary shares issued/fully paid @ $2.50

1 April 2021: 60 000 ordinary shares issued/fully paid @ $3.00

• A cash dividend of $22 000 was declared and paid during the 2021 financial year.

Balance of other relevant accounts of the Sydney Ltd For the year ending 30 June 2021 are provided below:

Accounts	$
Cash on hand	75,000
Cash on deposit, at call	60,000
Trade debtors	1,620,000
Allowance for doubtful debts	40 ,000
Other debtors	850,000
Inventory	200,000
Trading securities	25,000
Land	125,000
Buildings	500,000
Accumulated depreciation buildings*	?
Furniture	200,000
Accumulated depreciation Furniture *	?
Patents	180,000
Amortisation of patent	55,000
Bank loans	553,000
Other loans	300,000
Trade creditors	1,200,000
Provision for employee benefits	50,000
Warranty provision	45,000
Current tax payable	40,000
Deferred tax liability	35,000

Additional information

The following additional information was noted during the preparation of financial statements for the year ended 30 June 2021:

• Inventory was measured at the lower of cost and net realisable value as per AASB102.
• *Depreciation and accumulated depreciation for buildings and furniture need to be calculated.
• Trading securities are equity investments that are held for the purpose of selling and short-term profit taking.
• $20 000 of bank loans are repayable within 1 year. The remaining amount is payable in full at the end of 2030. The loans are secured over the land.
• $150 000 of other loans are repayable within 1 year. The remaining amount is payable in full at the end of 2024.
• The provision for employee benefits includes $20 000 payable within 1 year.
• The warranty provision is in respect of a 12-month warranty given on certain goods sold.
• Buildings and furniture were measured at cost. The benefits were expected to be received evenly over the useful life of the asset. The residual values are negligible. Building was acquired on 1 July 2019 for $500,000 (cost) and estimated useful life is 20 years. Furniture was acquired on 1 January 2020 for $200,000 (cost) and estimated useful life is 10 years.
• Land was revalued upward by $5 000 to $125 000 (assume zero income tax for this transaction). There had been no previously recognised reserve for revaluation surplus. The valuation was conducted by the registered valuer, The Valuable Pty Ltd.
• Sydney Ltd transferred $10,000 out of retained earnings into general reserve.

Required:

For the year ending 30 June 2021 (NOTE: comparative financial statements are not required),

1. Prepare a statement of changes in equity for Sydney Ltd in accordance with the requirements of AASB 101;
2. Prepare a statement of financial position for Sydney Ltd in accordance with AASB 101. Use the current/non-current presentation format;
3. Prepare appropriate notes to the accounts. (You are not required to prepare a note related to income taxes. Include the following note as note 1. You may optionally add accounting policies to this note)

"1. Summary of significant accounting policies

Basis of accounting

The financial report is a general purpose financial report which has been prepared on the historical cost basis, except where stated otherwise.

Statement of Compliance

The financial statements have been prepared in accordance with the requirements of the Corporations Act, Australian Accounting Standards which include Australian equivalents to International Financial Reporting Standards (AIFRSs) and AASB Interpretations. Compliance with AIFRSs ensures the financial statements and notes comply with International Financial Reporting Standards."