The following information relates to Omega Ltd as at 30 June 2010: $000 Trade Debtors 183 Loans to Directors - repayable on demand 17 Cash at Bank 138 Deposits at Call 40 Inventories Raw Materials at cost 100 Work In Progress at cost 250 Finished Goods at cost 800 Finished Goods at net realisable value 400 Financial Assets - Listed shares at fair value (held for trading) 246 Goodwill at cost 400 Accumulated Impairment - goodwill - 80 Computer Software at cost 500 Accumulated Amortisation - computer software - 100 Deferred Tax Assets 62 GST Payable 47 Trade Creditors 700 Dividend Payable 646 Provision for Long Service Leave (amount due after 12 months, $100,000) 150 Current Tax Payable 154 Deferred Tax Liabilities 20 Allowance for Doubtful Trade Debtors 18 Equity 100,000 Ordinary Shares fully paid 5,000 Equity 8,000,000 Ordinary Shares issued at $0.50, paid to $0.25 2,000 General Reserve 30/06/2010 200 Retained Earnings 30/06/2010 400 Required: Prepare the following sections of the balance sheet and required notes in accordance with accounting standards: ( a ) The Current Assets section ( b ) The Non-Current Assets section

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 28E

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Question

The following information relates to Omega Ltd as at 30 June 2010:

	$000
Trade Debtors	183
Loans to Directors - repayable on demand	17
Cash at Bank	138
Deposits at Call	40
Inventories
Raw Materials at cost	100
Work In Progress at cost	250
Finished Goods at cost	800
Finished Goods at net realisable value	400
Financial Assets - Listed shares at fair value (held for trading)	246
Goodwill at cost	400
Accumulated Impairment - goodwill	- 80
Computer Software at cost	500
Accumulated Amortisation - computer software	- 100
Deferred Tax Assets	62
GST Payable	47
Trade Creditors	700
Dividend Payable	646
Provision for Long Service Leave (amount due after 12 months, $100,000)	150
Current Tax Payable	154
Deferred Tax Liabilities	20
Allowance for Doubtful Trade Debtors	18
Equity 100,000 Ordinary Shares fully paid	5,000
Equity 8,000,000 Ordinary Shares issued at $0.50, paid to $0.25	2,000
General Reserve 30/06/2010	200
Retained Earnings 30/06/2010	400

Required:

Prepare the following sections of the balance sheet and required notes in accordance with accounting standards:

( a ) The Current Assets section

( b ) The Non-Current Assets section

Q4.On 1 July 2007 South Ltd acquired all the share capital of West Ltd for $160,000. At that date the accounts of West Ltd show the following:

Share capital

$100,000

General reserve

30,000

Retained earnings

20,000

Additional information for the year ended 30 June 2010

1. Sales by West Ltd to South Ltd during the year amounted to $ 110,000.

2. Unrealised profit in inventory of South Ltd:

• 01/07/2009 $5,000

• 30/06/2010 $3,000

3. On 1 January 2010 South Ltd sold an item of plant to West Ltd for $45,000, making a profit on the sale of $10,000. West Ltd depreciates plant at 20% per annum on cost.

4. Included in the other assets of South Ltd is a three-year loan of $20,000 at 15% per annum to West Ltd made on 1 April 2010. Three months interest was accrued by both companies at 30 June 2010.

5. Goodwill is tested annually for impairment; goodwill has been impaired by:

$1,000 for the year ended 30 June 2009; and

$2,000 for the year ended 30 June 2010.

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