1. Bencorp Plantations Pty Ltd is a manufacturer of coconut-based products that commenced operations in August 2020. Coconut Plantations Pty Ltd has been trading for a further year to 31 December 2021 and has the following balances in various accounts. There have been no additional shares issued. Prepare a statement of profit or loss and statement of changes in equity for Coconut Plantations Pty Ltd for the year ended 31 December 2021, classifying operating expenses by function. Also prepare a statement of changes in equity for the year ended 31 December 2021 assuming the share capital as at 1 January 2021 was $250,000 and retained earnings were $91,500as at 1 January 2021:

1. al)

Account Title	Ending ledger balance in AUD$
Sales salaries	74,000
Depreciation of warehouse	14,000
Utilities expenses	9,120
Warehouse rate expense	22,400
Warehouse insurance expense	16,600
Advertising expense	60,000
Telephone expense	5000
Administrative salaries	89,000
Cash at Bank	39,200
Receivables	94,000
Inventories (finished goods raw material)	170,000
Property plant and equipment (net)	335,000
Accounts payable	44,600
Loan	141,000
Income tax payable	97,500
Sales revenue	1570 000
Cost of sales	807,600
Interest income	2000
Dividend	120,000
Income tax	88,400

2. Coconut Plantations Pty Ltd purchased machinery for its manufacturing process on 1 March 2018. The machinery cost $600 000. Coconut Plantations estimates that the machinery has a useful life of five years and will have a $50 000 residual value. Using straight-line depreciation, estimate the depreciation expense to be recorded for the year in which the machine was purchased and the subsequent year, assuming Coconut Plantations’ reporting period ends on 31 December.

PART B: As a trainee accountant, you have been asked to determine the monetary value that should be assigned to the inventory of sporting equipment on hand as at the end of the financial year for Outdoor Adventures Ltd. You are currently looking at the inventory levels of a training shoe that is very popular. The number of pairs of shoes on hand at the start of the accounting period was 200 and these had a monetary value of $10 000 assigned to them. During the year, a further 1500 pairs of the training shoe were purchased and, at the end of the year, a stocktake revealed that there were 60 pairs unsold. The purchases were made throughout the year. Five hundred pairs of shoes were purchased at a unit price of $60, a further 500 pairs of shoes at a unit price of $65 and a further 500 pairs at a price of $63.

Required: 

Calculate the cost of sales and closing inventory under FIFO method of inventory valuation. 

Answer rating: 100% (QA)

Prepare a statement of profit or loss and statement of changes in equity for Coconut Plantations Pt... View the full answer