Galaxy Limited is a manufacturing company with a 30 April year-end. The company showed the following figures
Question:
Galaxy Limited is a manufacturing company with a 30 April year-end.
The company showed the following figures on 30 April:
2021 2020
Rand Rand
Profit before tax 542 855 491 950
Taxation (130 125) (119 220)
Profit for the year 412 730 372 730
Other comprehensive income - -
Total comprehensive income for the year 412 730 372 730
Retained earnings 1 110 925 698 195
The above figures are before correcting the following error: While preparing the financial statements for the 30 April 2021 financial year, the financial accountant noticed that the electricity expense for April 2020 was mistakenly included as an expense for May 2020. The amount of R125 400 was therefore not included in the 30 April 2020 financial statements. You can assume that the amount is material and that an Income tax rate of 28% applies.
To show the correction of the above error, prepare the following for Galaxy Limited’s 30 April 2021 financial year:
3.1) The Statement of Profit or Loss and Other Comprehensive Income. (14 marks)
3.2) The Statement of Changes in Equity only showing the retained earnings. (10 marks)
3.3) The note disclosure required for the correction of the error
Expert Answer:
31 Statement of Profit or Loss and Other Comprehensive Income 2021 Rand Revenue 1000000 Expenses Ele... View the full answer
