Mandolin Co is a quoted manufacturing company. Its finished products are stored in a nearby warehouse...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Mandolin Co is a quoted manufacturing company. Its finished products are stored in a nearby warehouse until ordered by customers. Mandolin Co has performed very well in the past, but has been in financial difficulties in recent months and has been reorganising the business to improve performance. The trial balance for Mandolin Co at 31 March 20X3 was as follows: Sales Cost of goods manufactured in the year to 31 March 20X3 (excluding depreciation) Distribution costs Administrative expenses Restructuring costs Interest received Loan note interest paid Land and buildings (including land $20,000,000) Plant and equipment Accumulated depreciation at 31 March 20X2: Buildings Plant and equipment Investment properties (at market value) Inventories at 31 March 20X2 Trade receivables Bank and cash Ordinary shares of $1 each, fully paid Share premium Revaluation surplus Retained eamings at 31 March 20X2 Ordinary dividends paid 7% loan notes 20X7 Trade payables Proceeds of share issue $'000 (i) () 94,000 9,060 16,020 121 639 50,300 3,720 24,000 4,852 9,330 1,190 1,000 214,232 Additional information provided: (1) The property, plant and equipment are being depreciated as follows: Buildings 5% per annum straight line Plant and equipment 25% per annum reducing balance $'000 124,900 1,200 6,060 1,670 20,000 430 3,125 28,077 18,250 8,120 2,400 214,232 Depreciation of buildings is considered an administrative cost while depreciation of plant and equipment should be treated as a cost of sale On 31 March 20X3 the land was revalued to $24,000,000 Income tax for the year to 31 March 20X3 is estimated at $976,000 Ignore deferred tax. (iv) The closing inventories at 31 March 20X3 were $5,180,000. An inspection of finished goods found that a production machine had been set up incorrectly and that several production batches, which had cost $50,000 to manufacture, had the wrong packaging. The goods cannot be sold in this condition but could be repacked at an additional cost of $20,000. They could then be sold for $55,000. The wrongly packaged goods were included in closing inventories at their cost of $50,000. (v) The 7% loan notes are 10-year loans due for repayment by 31 March 20X7. Interest on these loan notes needs to be accrued for the six months to 31 March 20X3. (vi) The restructuring costs in the trial balance represent the cost of a major restructuring of the company to improve competitiveness and future profitability. (vii) No fair value adjustments were necessary to the investment properties during the period. (viii) During the year the company issued 2 million new ordinary shares for cash at $1.20 per share. The proceeds have been recorded as 'Proceeds of share issue'. Required Prepare the statement of profit or loss and other comprehensive income and statement of changes in equity for Mandolin Co for the year to 31 March 20X3 and a statement of financial position at that date. Notes to the financial statements are not required, but all workings must be clearly shown. Mandolin Co is a quoted manufacturing company. Its finished products are stored in a nearby warehouse until ordered by customers. Mandolin Co has performed very well in the past, but has been in financial difficulties in recent months and has been reorganising the business to improve performance. The trial balance for Mandolin Co at 31 March 20X3 was as follows: Sales Cost of goods manufactured in the year to 31 March 20X3 (excluding depreciation) Distribution costs Administrative expenses Restructuring costs Interest received Loan note interest paid Land and buildings (including land $20,000,000) Plant and equipment Accumulated depreciation at 31 March 20X2: Buildings Plant and equipment Investment properties (at market value) Inventories at 31 March 20X2 Trade receivables Bank and cash Ordinary shares of $1 each, fully paid Share premium Revaluation surplus Retained eamings at 31 March 20X2 Ordinary dividends paid 7% loan notes 20X7 Trade payables Proceeds of share issue $'000 (i) () 94,000 9,060 16,020 121 639 50,300 3,720 24,000 4,852 9,330 1,190 1,000 214,232 Additional information provided: (1) The property, plant and equipment are being depreciated as follows: Buildings 5% per annum straight line Plant and equipment 25% per annum reducing balance $'000 124,900 1,200 6,060 1,670 20,000 430 3,125 28,077 18,250 8,120 2,400 214,232 Depreciation of buildings is considered an administrative cost while depreciation of plant and equipment should be treated as a cost of sale On 31 March 20X3 the land was revalued to $24,000,000 Income tax for the year to 31 March 20X3 is estimated at $976,000 Ignore deferred tax. (iv) The closing inventories at 31 March 20X3 were $5,180,000. An inspection of finished goods found that a production machine had been set up incorrectly and that several production batches, which had cost $50,000 to manufacture, had the wrong packaging. The goods cannot be sold in this condition but could be repacked at an additional cost of $20,000. They could then be sold for $55,000. The wrongly packaged goods were included in closing inventories at their cost of $50,000. (v) The 7% loan notes are 10-year loans due for repayment by 31 March 20X7. Interest on these loan notes needs to be accrued for the six months to 31 March 20X3. (vi) The restructuring costs in the trial balance represent the cost of a major restructuring of the company to improve competitiveness and future profitability. (vii) No fair value adjustments were necessary to the investment properties during the period. (viii) During the year the company issued 2 million new ordinary shares for cash at $1.20 per share. The proceeds have been recorded as 'Proceeds of share issue'. Required Prepare the statement of profit or loss and other comprehensive income and statement of changes in equity for Mandolin Co for the year to 31 March 20X3 and a statement of financial position at that date. Notes to the financial statements are not required, but all workings must be clearly shown.
Expert Answer:
Answer rating: 100% (QA)
Mandolin Co Statement of Profit or Loss and Other Comprehensive Income For the year ended 31 March 20X3 Notes 000 Revenue 214232 Cost of sales Cost of ... View the full answer
Related Book For
Auditing and Assurance services an integrated approach
ISBN: 978-0132575959
14th Edition
Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley
Posted Date:
Students also viewed these accounting questions
-
Which of the following compounds is consistent with the mass spectrum shown below: Explain in your own words why you made such a selection 100 80 40 10 70 80 100 110 120 30 50 60 90 m/z A....
-
The demand for a new product at Company B is anticipated to be normally distributed with a mean of 100 and a standard deviation of 50. Each unit costs 75 and the introductory price is to be 125. Any...
-
When Steve Jobs first demonstrated "the pinch"-the two-finger gesture to zoom in and out on photos and Web pages on the iPhone, it just rocked the mobile phone industry-the whole digital world heard...
-
If you are grilling hamburgers and getting impatient, why is it a good idea to flatten the burgers to make them wider and thinner?
-
The following is a summary of a cash book as presented by George Ltd for the month of October: All receipts are banked and all payments are made by cheque On investigation you discover: (1) Bank...
-
The data below pertains to the number of hours a laptop has been charged for and the number of hours of backup provided by the battery. (a) Use the first set of expressions on page 330, involving...
-
Market Potential Indicators (MPI) is an indexing study conducted by the Michigan State University Center for International Business Education and Research (MSU-CIBER) to compare emerging markets on a...
-
Current year (end of year) 0 Real risk-free rate 2.5% Expected inflation Year 1 8.0% 2 6.0% 3 4.0% 4 3.0% 5 5.0% 6 and beyond 3.0% Maturity risk premium Annual 0.1% Maximum 2.0% Years Real risk-free...
-
Consider a specimen of ice that is at 210C and 1 atm pressure. Using Figure 9.2, the pressure-temperature phase diagram for H2O, determine the pressure to which the specimen must be raised or lowered...
-
Two bodies, each of mass M, are kept fixed with a separation 2L. A particle of mass m is projected from the midpoint of the line joining their centres, perpendicular to the line. The gravitational...
-
8. Sam bought a house that costs $500,000. Sam got a 96% LTV loan. The lender demanded that Sam buy private mortgage insurance to insure the portion of the loan over 75% LTV. Suppose 5 years later,...
-
After Dans analysis for East Coast Yachts (see the Case study for Module 2), Larissa has decided to expand the companys operations. She has asked Dan to enlist an underwriter to help sell $50 million...
-
Apple stock is currently selling at 200$. You purchase a 30 day call with a strike price of 200$ for 18$ and 30 day put for the same strike price for 20$. What are your total losses or gain at prices...
-
What is Catalytic Enantioselective Fluorination with suitable examples with mechanisms.
-
WHAT IS THE IMPORTANCE OF ACCOUNTING IN BUSINESS?
-
Papaya Inc. intends to invest in one of two fruit juice manufacturing plants, Plant A and Plant B. The life of Plant A and Plant B models is 12 years. Plant A requires an initial investment of...
-
Suppose that a business sells 6-month subscriptions to its monthly magazine. On January 1, the company receives a total of $600 for 10 subscriptions. To record this transaction, the company debits...
-
The list below indicates various audit, attestation, and assurance engagements involving auditors. 1. A report on the effectiveness of internal control over financial reporting as required by Section...
-
Multiple Choice Questions The following questions concern audit documentation. Choose the best response. a. Which of the following is not a primary purpose of audit documentation? (1) To coordinate...
-
Multiple Choice Questions The following questions deal with errors and fraud. Choose the best response. a. An independent auditor has the responsibility to design the audit to provide reasonable...
-
Describe how partial and circular reasoning can be helpful or harmful in resolving ethical dilemmas.
-
Describe the various legal risks for nurses.
-
Describe the various roles of advanced practice nurses.
Study smarter with the SolutionInn App