The trial balance of ABC Pte Ltd for the year ended 31 December 2009 is as follows:
$000s $000s
Debits Credits
Purchases 52,400
Revenue 98,800
Opening inventory (stock) 1 January 2009 2,800
Distribution expenses (note vi) 6,300
Administration expenses (note vii) 3,100
Dividends received from investment in XYZ Pte Ltd 110
Preference dividend paid 45
Ordinary dividend paid 90
Investment in XYZ Pte Ltd at cost 20,000
Trade receivables (debtors) 2,400
Trade payables (creditors) 2,040
Land and Property at valuation (note ii) 40,000
Plant and equipment at cost (note iii) 3,400
Plant and equipment accumulated depreciation as at 1 January 2009 1,020
Revaluation reserve 4,000
Retained earnings as at 1 January 2009 3,600
Ordinary share capital $1 shares 20,000
5% preference shares $1 900
8% Debentures (note iv) 4,000
Bank and cash 3,905
Bank interest paid 30
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134,470 134,470
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(Note that figures in the table above are in $000s.)
The following notes are applicable:
(I) The inventory (stock) valuation as at 31 December 2009 is $3,100,000.
(ii) The land and property is revalued annually. The last revaluation was 31 December
2008. As at 31 December 2009 the land and property has not increased in value above its book value of $40,000,000. The property, which was valued at $30,000,000 as at 31 December 2008, is estimated to have a useful life of 30 years as from
31 December 2008 and should be depreciated on a straight-line basis assuming no residual value. Depreciation is to be charged 60% to distribution expenses and 40% to administration expenses.
(iii) Plant and equipment is to be depreciated at 10% per annum on a straight-line basis and charged 60% to distribution expenses and 40% to administration expenses.
(iv) The interest on debentures for the year has not been paid and must be accrued.
(v) Tax for the year ended 31 December 2009 is chargeable at 17% of profits for the year before receipt or payment of dividends.
(vi) Included in distribution expenses is an amount of $80,000, which is a short term warehouse rental payment relating to the period 1 September 2009 to 30 April 2010.
(vii) Insurance amount of $80,000 due for the year, chargeable to administration expenses, has not been paid or accounted for in the above trial balance as at 31 December 2009.
Required:
Prepare the income statement (profit and loss account) for the year ended 31 December 2009 and the balance sheet as at that date for ABC Pte Ltd in accordance with relevant International Accounting Standards (IASs).
(20 marks)
