Taylor Co. had trial balances at September 30 20X0, as follows: Items Debit (S) Credit (S) Cash 90,000 Short-term investments 15,200 Trade receivables 30,000 Inventories 22.000 Non-current assets 46,500 Bank 5,000 Trade payables 40,000 12% Loan notes 20,000 Ordinary shares 15 100,000 Retained earnings 20.000 Revaluation surplus 5,000 Wages and salaries 10,000 Tax payables 3,500 Accruals 200 Total 203,700 203,700 The following information for transactions from October to December 20X0 are available: 1. Cash purchase: S45,000, purchase returns (with cash refund): 8,000 Credit purchase: $80,000 Inventory at 31 December 20X0 was valued at $35,000 based on its original cost. However, $10,000 of this inventory has been obsolete and the directors have agreed to sell it in January 20X1 for a cash price of $7,500. At December 31, 20x0, outstanding trade payables were $60,000 2. Total sales: $225,000. At December 31, 20X0, trade receivables were $50,000. Settlement discounts allowed: $11,000 3. Wages and salaries expense incurred: $18,000. Wages and salaries outstanding for the year ended 31 Dec 20X0: $5,000 4. Tax payables at the end of the year: $5,900. CIT rate: 20%. 5. $2,000 of bad debt was written off. 6. Telephone, property and other expenses incurred and paid by cash: $8,500 Cost (S) 7. Loan notes were issued at 01 September 20X0. Taylor proposed to pay loan note interest for the first 6 months at 31 January 20X1, by cash. 8. Taylor made a right issue of I share for every 5 held at a premium of 50c per share. 9. Dividends paid amounted to $9,000 10. The following information relates to PPE: Accumulated Carrying amount Depreciation (S) (30/9/XO) (S) Building 42,000 12,000 30,000 Machinery 20,000 6,000 14,000 Furniture 8,000 5,500 2.500 Total 70,000 23,500 46,000 (i) Building was depreciated 10% at cost annually (i) All machinery and furniture had no residual value. 5 years of useful life and were depreciated on the basis of straight-line method (iii) At 31/10/20x0, Taylor made a disposal of a machinery. This machinery was $6,000 at cost. Carrying amount at disposal date was $3,000. The proceeds from this disposal was settled by cash of $3,200. (iv) At 31/12/20x0, Taylor decided to value its building to $50,000. Required: (1) Show your workings and make accounting entries for those transactions above. (35 marks) (2) Prepare the following statements (for internal use): (a) The income statement for the quarter ended 31 December 20X0 (15 marks) (b) The statement of financial position as at 31 December 20X0 (15 marks) (3) At 01 January 20X1, Taylor Co. acquired X1 % of ordinary shares of Rachel Co. Taylor partly owned Rachel and achieved the control. Market value of Rachel's share at acquisition date was ($) X2. Give appropriate information in X1, X2 and prepare the consolidated statement of financial position as at acquisition date? (15 marks) Additional information: The statement of financial position of Rachel Co. at 01 January 20X1 was as follows: RACHEL CO Statement of financial position as at 01 January 20X1 Assets Non-current assets 82,000 Current assets Inventory 5,000 Trade receivables 15,000 Total assets 102,000 Equity and Liabilities Equity Share capital (13) Retained earnings Other reserves Liabilities Trade payables Total Equity and liabilities 60,000 15,000 3,000 24,000 102,000 Taylor Co. had trial balances at September 30 20X0, as follows: Items Debit (S) Credit (S) Cash 90,000 Short-term investments 15,200 Trade receivables 30,000 Inventories 22.000 Non-current assets 46,500 Bank 5,000 Trade payables 40,000 12% Loan notes 20,000 Ordinary shares 15 100,000 Retained earnings 20.000 Revaluation surplus 5,000 Wages and salaries 10,000 Tax payables 3,500 Accruals 200 Total 203,700 203,700 The following information for transactions from October to December 20X0 are available: 1. Cash purchase: S45,000, purchase returns (with cash refund): 8,000 Credit purchase: $80,000 Inventory at 31 December 20X0 was valued at $35,000 based on its original cost. However, $10,000 of this inventory has been obsolete and the directors have agreed to sell it in January 20X1 for a cash price of $7,500. At December 31, 20x0, outstanding trade payables were $60,000 2. Total sales: $225,000. At December 31, 20X0, trade receivables were $50,000. Settlement discounts allowed: $11,000 3. Wages and salaries expense incurred: $18,000. Wages and salaries outstanding for the year ended 31 Dec 20X0: $5,000 4. Tax payables at the end of the year: $5,900. CIT rate: 20%. 5. $2,000 of bad debt was written off. 6. Telephone, property and other expenses incurred and paid by cash: $8,500 Cost (S) 7. Loan notes were issued at 01 September 20X0. Taylor proposed to pay loan note interest for the first 6 months at 31 January 20X1, by cash. 8. Taylor made a right issue of I share for every 5 held at a premium of 50c per share. 9. Dividends paid amounted to $9,000 10. The following information relates to PPE: Accumulated Carrying amount Depreciation (S) (30/9/XO) (S) Building 42,000 12,000 30,000 Machinery 20,000 6,000 14,000 Furniture 8,000 5,500 2.500 Total 70,000 23,500 46,000 (i) Building was depreciated 10% at cost annually (i) All machinery and furniture had no residual value. 5 years of useful life and were depreciated on the basis of straight-line method (iii) At 31/10/20x0, Taylor made a disposal of a machinery. This machinery was $6,000 at cost. Carrying amount at disposal date was $3,000. The proceeds from this disposal was settled by cash of $3,200. (iv) At 31/12/20x0, Taylor decided to value its building to $50,000. Required: (1) Show your workings and make accounting entries for those transactions above. (35 marks) (2) Prepare the following statements (for internal use): (a) The income statement for the quarter ended 31 December 20X0 (15 marks) (b) The statement of financial position as at 31 December 20X0 (15 marks) (3) At 01 January 20X1, Taylor Co. acquired X1 % of ordinary shares of Rachel Co. Taylor partly owned Rachel and achieved the control. Market value of Rachel's share at acquisition date was ($) X2. Give appropriate information in X1, X2 and prepare the consolidated statement of financial position as at acquisition date? (15 marks) Additional information: The statement of financial position of Rachel Co. at 01 January 20X1 was as follows: RACHEL CO Statement of financial position as at 01 January 20X1 Assets Non-current assets 82,000 Current assets Inventory 5,000 Trade receivables 15,000 Total assets 102,000 Equity and Liabilities Equity Share capital (13) Retained earnings Other reserves Liabilities Trade payables Total Equity and liabilities 60,000 15,000 3,000 24,000 102,000