Homework answers / question archive / XYZ Pty Ltd Balance Sheet For the year ended 30 June 2014 $ LA ASSETS CURRENT ASSETS Cash at bank 5,100 Accounts receivable 20,000 (4,000) Less: Allowance for doubtful debts Accounts receivable (Net) 16,000 Inventory 75,000 TOTAL CURRENT ASSETS 96,100 NON-CURRENT ASSETS Property, plant & equipment - At cost Less: Accumulated depreciation - PPEI PPE (Net) 40,000 (8,000) 32

XYZ Pty Ltd Balance Sheet For the year ended 30 June 2014 $ LA ASSETS CURRENT ASSETS Cash at bank 5,100 Accounts receivable 20,000 (4,000) Less: Allowance for doubtful debts Accounts receivable (Net) 16,000 Inventory 75,000 TOTAL CURRENT ASSETS 96,100 NON-CURRENT ASSETS Property, plant & equipment - At cost Less: Accumulated depreciation - PPEI PPE (Net) 40,000 (8,000) 32

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XYZ Pty Ltd Balance Sheet For the year ended 30 June 2014 $ LA ASSETS CURRENT ASSETS Cash at bank 5,100 Accounts receivable 20,000 (4,000) Less: Allowance for doubtful debts Accounts receivable (Net) 16,000 Inventory 75,000 TOTAL CURRENT ASSETS 96,100 NON-CURRENT ASSETS Property, plant & equipment - At cost Less: Accumulated depreciation - PPEI PPE (Net) 40,000 (8,000) 32.000 TOTAL NON-CURRENT ASSETS 32,000 TOTAL ASSETS 128,100 LIABILITIES CURRENT LIABILITIES Accounts payable Provision for income tax 12,000 6,300 LIABILITIES CURRENT LIABILITIES Accounts payable Provision for income tax 12,000 6,300 TOTAL CURRENT LIABILITIES 18,300 TOTAL LIABILITIES 18,300 NET ASSETS 109,800 I EQUITY 100 Share capital Retained earnings 109,700 TOTAL EQUITY 109,800 XYZ Pty Ltd Income Statement For the year ended 30 June 2014 $ REVENUE Sales 100,000 TOTAL REVENUE 100,000 COST OF SALES Cost of sales 45,000 TOTAL COST OF SALES 45,000 GROSS MARGIN 55,000 EXPENSES Accounting fee Rent expense Administrative expense Depreciation expense Salary expense 5,000 11,000 5,000 8,000 6,000 TOTAL EXPENSES 35,000 EARNINGS BEFORE INTEREST AND TAX 20,000 Accounting Tee Rent expense Administrative expense Depreciation expense Salary expense 5,UUU 11,000 5.000 8,000 6,000 TOTAL EXPENSES 35,000 EARNINGS BEFORE INTEREST AND TAX 20,000 FINANCIAL INCOME Interest income 1,000 EARNING BEFORE TAX 21,000 Less: Income tax expense 6,300 I NET PROFIT AFTER TAX 14,700 Additional information: The property, plant and equipment was purchased on 1 July 2013 with the cost of $40,000. The useful life was expected as 5 years. Straight line method was used The perpetual method is used for inventory. Based on prior experience, XYZ Pty Ltd's bad debts expense is normally 2% of net credit sales for the current year. Under taxation legislation, revenue will be taxable when received. The taxation depreciation for PPE is $9,000. Under taxation legislation, no deduction is allowed for entertainment expenditure. ? Under taxation legislation, no deduction is allowed for bad debts until they have been written off. The company income tax rate is 30%. Ignoring GST impact. I During the year 2014-15, the following transactions incurred: 1. The company purchased a land for an office location with the amount of $20,000. The company paid $5,000 in cash and borrowed $15,000 from bank to pay the balance. 2. The company made a payment of $10,000 to its suppliers of computers (linked with "accounts payable" account). 3. The company paid $7,000 for employee salary, $12,000 for rent, $3,000 for accounting fee and $5,000 for entertainment in cash. 4. The company made a loan repayment with the amount of $5,000, of which $4,500 was the interest paid and $500 was the reduction of principal amount. 5. The company purchased 10 computers from its suppliers at $900 each, in cash. The net realisable value is estimated as $950 each. 6. The company sold 90 computers during the year for $1,300 each, on credit. The computers were purchased in last year with the cost of $800 each. 7. 5 computers from the sales in Transaction 6 were returned by the customers. 8. The company received $120,000 in cash for the sales invoices previously issued. 9. The company received $3,000 in the bank account as credit interest. 10. The company decided to write off $1,000 from the receivables as it cannot collect the money from the clients after repeated attempts. 11. The company paid last-year income tax during the year.