Financial statement presentation

Skin Care Ltd is a company specialises in distributing beauty products imported from Korea to beauty salons throughout Australia and operate beauty salons in Albury and Wangaratta cities. The trial balance of the company for the year ended 30 June 2021 includes the following accounts

Debit Credit $

Sales revenue 1,106,000

Interest revenue 8,000

Cost of sales 524,000

Impairment loss – goodwill 5,000

Amortisation expense – patent 18,000

Gains from sales of motor vehicles 10,000

Depreciation – motor vehicles 68,000

Doubtful debts expense. 11,000

Interest expense 21,000

Office expense 85,000

Rental expense 17,000

Salaries 187,000

Selling expense 68,000

Miscellaneous expense 28,000

Proceeds from insurance claims 20,000

Income tax expense 39,000

Cash on hand 4,000

Inventories 92,000

Accounts receivable 118,000

Allowance for doubtful debts 11,000

Bank deposits 130,000

Deferred tax assets 18,000

Patent (cost) 220,000

Accumulated amortisation – patent 20,000

Goodwill 100,000

Accumulated impairment losses – goodwill 25,000

Motor vehicles 472,000

Accumulated depreciation – motor vehicles 203,000

Accounts payable 114,000

Bank loan 175,000

Bank overdraft 13,000

Current tax liabilities 37,000

Deferred tax liabilities 22,000

Paid up capital (ordinary) 400,000

Foreign currency translation reserve 25,000

Retained earnings at 1 July 2020 36,000

2,225,000. 2,225,000

Additional information: •

The patent relates to the fees paid to a Korean manufacturer which produces an antiaging product called “TrueSelf” so that Skin Care Ltd has the sole agency rights to market “TrueSelf” in Australia for the years until end of 2027. •

An interim dividend of $16,000 was paid on 15 December 2020 and the directors have declared a final dividend of $32,000. • The foreign currency translation reserve had an opening balance at 1 July 2020 of $10,000. During the year ended 30 June 2021, this reserve was credited with a foreign currency translation gain of $15,000 (after deducting tax on this item of $3,000), in accordance with the relevant accounting standard.

• Bank deposits are all with maturity of less than three months. • Bank loan has maturity period of more than three years. • The following expenses are allocated for administrative and selling and distribution expenses for the purposes of preparation of the statement of profit or loss and other comprehensive income:Required: As the assistant accountant of Skin Care Ltd, prepare the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of financial position for Skin Care Ltd for the year ended 30 June 2021. The statements should be presented in accordance to the requirements of any relevant authorities and/or best practices available. T

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