UNIT 1: June 2012, QUESTION #3

WORKINGS:
Note 2:
The invoices for the utilities NOT received for June $12,000 is to be treated as a prepayment.
Therefore $12,000 will be recorded under the Current Assets section of the Statement of Financial Position. The balance of $70,000 for utilities from the trial balance will be adjusted to $58,000 ($70,000-$12,000), to account for the prepayment.               
Note 3:
The $2,000 prepayment for July and August 2011 will be recorded under the Current Assets section of the Statement of Financial Position. The balance of $14,000 for insurance from the trial balance will be adjusted to $12,000 ($14,000-$2,000), to account for the prepayment. 
Note 4:
Depreciation on Fixtures and Fittings: 25% x [$226,000-$88,000] = $34,500 for year 2011. This is the depreciation charge for the Statement of Comprehensive Income.
Accumulated depreciation charged on Fixtures and Fittings as at June 30th, 2011 - [$88,000 + $34,500] = $122,500. This is the accumulated depreciation figure for the Statement of Financial Position.
Note 5:
Depreciation on Buildings: 5% x [$592,000] = $29,600 for year 2011. This is the depreciation charge for the Statement of Comprehensive Income.
Accumulated depreciation charged on Buildings as at June 30th, 2011 - [$48,000 + $29,600] = $77,600. This is the accumulated depreciation figure for the Statement of Financial Position.                                         
Note 6:
The land has been revalued upwards therefore the double entry to record the revaluation of land is:
Debit:    Land Account     $12,000
                          Credit:        Revaluation Reserve Account     $12,000
Note the Revaluation Reserve Account will appear in the Statement of Financial Position.
Note 7:
The long term loan will be recorded as follows:
$10,000 will be recorded under the Current Liabilities section of the Statement of Financial Position as this portion is due to be paid in less than 1 year.
The balance $30,000, ($40,000-$10,000) will be recorded under the Non-Current Liabilities section of the Statement of Financial Position as this portion is not due to be paid in less than 1 year. 
Note 8:
The income tax liability of $40,000 is an expense and will appear in the Statement of Comprehensive Income. This figure will also be recorded under the Current Liabilities section of the Statement of Financial Position as it is an accrual.

Now that all of the additional information has accounted for the Statement of Comprehensive Income can be prepared. ​

Now that the Statement of Comprehensive Income has been completed the Statement of
Financial Position can be prepared.

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