Modern Electronics Company LtdStatement for Comprehensive Income for 30th June 2012Note2012($000)2013Revenues2121,342Other income3800122,142Expenses (without financial costs)4(65382.2)Financial costs7(244.4)Profit before income tax55,515.1Income tax expense638860.57Profit for the year16654.53Other comprehensive incomes31048Total comprehensive income for the year17702.53Modern Electronics Company LtdStatement of financial position as at 30th June 2012Note2012($)2013Current assetsTrade and receivables32,750,000Cash at bank380,000Inventories14510,000Prepaid insurance170,000Prepaid advertising33,000Total current assets47,843,000Non current assetsPlant $ equipment11,870,000Vehicles584,000Intangible assets4,400,000Land16,070,000Total non-current assets32,924000Total assets80,767,000Current liabilitiesAccrued liabilities4,868,000Accounts payable28,900,000Total current liabilities33,768,000Noncurrent liabilitiesLoan from bank3,000,000Total liabilities36,768,000Net Assets43,999,000EquityShare capital25,439,530Reserves9,940,000Retained earnings10,029,000Total equity45,408,530Modern Electronics Company LtdStatement of changes in EquityShare capitalGeneral reservesRetained earningsTotal equityBal at 1 July 20118,437,000943000011,239,00029,106,000Less discount share issue(700,000)(700,000)Total comprehensive income17,702,530Net profit for the periodTransfer from retained earnings510,000(510,000)25,439,5309,940,0001002900045,408530NOTES TO FININCIAL STATEMENTSNote 1.
Summary of Accounting policies Statement of compliance (AASB 101 para 7 & 8) The financial statements shows a true and fair financial position and financial performance of the company as per Corporation Act which requires compliance with Australia Accounting Standard. This also regard to the disclosure in the notes. It is also in accordance with International Financial Reporting Standards. Basis of preparation (AASB 101para 47-Aus 138.6) The financial report is meant for general purpose. It comprises of directors’ report and declaration, notes to statements, auditors’ report, and three financial reports (statement of changes in equity, statement of financial position, and comprehensive income statement).
The report is covers a single entity. It covers the period from Ist July 2011 to 30th June 2012. The currency is in dollars (Leo et al, 2009, p. 84). Significant accounting assumptions and estimates (AASB 101para ) Assumption and estimates are grounded on historical experience and other settings which are regarded to be significant. The carrying amount of some assets and abilities are usually determined using assumptions and estimates of events that will occur in future.
Significant assumptions and important carry a relevant risk owing to actual outcomes differing from estimated figures. Accounting policies (AASB101para 117 ) Reliable measurement was used in preparation of financial statement. The listed items are represented fairly in regard to understanding of financial statement. Share capitalOrdinary share is grouped as equity. The cost of share issue is subtracted from the revenue of share capital (CPA Australia Accounting Handbook). Employee benefitsEmployee benefits comprises of long service leave, annual leave, wages, and salaries. These are expected to be paid or settled within a period twelve months (Leo et al, 2009, p. 97). ProvisionsProvisions are recognized if the entity has an existing obligation (constructive or legal) owing to a past event.
It is likely that resources’ outflow encompassing economic benefit will be needed to settle the obligation and it is possible to make an estimate that is reliable of the amount of obligation (CPA Australia Accounting Handbook). Trade and other receivablesTrade and other receivable are determined by their gross amount after deduction of doubtful debt. Once identified Bad debts are written off and the entity cannot be able to collect the debt (Leo et al, 2009, p. 81). Inventories Inventories are valued at net realizable value and at a lower cost.
Net realizable value is the selling price that that is estimated in the ordinary course of business, subtracting estimated costs required to make the sale (Corporations Act, 2001). Finance costsFinance costs concerns to borrowing costs that are recognized as interest expense when realized. ExpenseExpenses are recognized in comprehensive income statement and on the basis of accrual. Income taxThe income tax is 30% of the gross profit.
Tax-effect accounting is ignored. Note 2. Revenue (AASB paraa 82)Revenue consists of sales revenue, interest income, royalty income, and rental income. It is ‘recognized if an increase in future benefit benefits resulted into an increase in an asset or a decrease of liability has come up and be measured (AASB Framework).