TASK 3.16 @@@ Dunhill Ltd: Financial statements 3.16.1 DUNHILL LTD STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 28 FEBRUARY 20.4 Note | Sales (6 302 000 ~ 33 000 - 12 900) 6 256 100 | Cost of sales (3 278 000 ~ 7 800) (3.270 200) | Gross profit 2.985 900 | Other operating income Commission income (264 000 - 6 600) Profit on disposal of asset (27 000 + 137 250 ~ 153 000) Provision for bad debts adjustment 270 450_| 257 400 11.250 1.800 Gross operating income 3 256 350 Operating expenses 2.975 520 Advertising 21 900 Audit fees (75 000 + 30 000) 105 000 Bad debts 15 900 Directors fees (965 000 + 240 000) Insurance (52 200 — 10 440) Packing materials (43 200 - 5 400) Rent expense (232 950 — 18 750) Salaries & wages (865 000 + 20 400 + 3 060 + 1920) 1205 000 41760 37 800 214 200 890 380 Vehicle expenses 104 400, Sundry expenses (178 650 - 128 000) diet 50 650 Depreciation (28 050 + 217 400 + 23 880*) e 269 330, Loss due to theft (42 000 - 33 000) - = 9000 Trading stock deficit 10 200 280 830 228 170 Operating profit 7 Interest income 1 Profit before interest expense __ Interest expense / financing cost ; 2 Net profit before tax a “452.000 Income tax =e 135 600) Net profit after tax 8 316 400 * Accept R23 999 if all fixed assets are valued at R1,00, however, itis more appropriate to Value each item at R1,00. Powered by (9 CamScanner436.2 STATEMENT OF FINANCIAL POSITION ON 25 FEBRUARY 20:4 ASSETS Note mel NNon-current assets 2.255 920 3 570 920 | Fixed/Tangible assets Financial assets: ‘Shares in Uptown Ltd Fixed deposit (660 000 - 225 000) current assets Inventory Trade and other receivables Cash and cash equivalents Total assets EQUITY AND LIABILITIES shareholders equity Ordinary share capital Retained income Foncurrent I Loan from Umgeni Lenders (253 500 + 57 000 - 78 000) Current liabilities Trade and other_payables _ “Current portion of loan’ <—— | Total equity and liabilities *May be shown in Note for Trade & other payables. 1250 000 435 000, 1827 290, 1.240 200 334 290 252 800 4 083 210 ous 3.031 400 2.563 200 468 200 232 500, 819 310, 741 310 78.000 4 083 210 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 20.4 1, INTEREST INCOME Dividends from investments (115 200 + 61 200) 176 400 Onfixed deposit T i 43200 ‘On current account __ f 2570 228 170 2, _ INTEREST EXPENSE On loan from Umgeni Lenders lee, 57 000 (7 57000 3._FIXED/TANGIBLE ASSETS Vehicles [Equipment Total Carrying value at beginning of year 832.000 24 000, 856 000, 1240 000 1810 000 (954 000; ree carrying value : ( re c Fi eeaiton iE - x EE BN 3. a) we oO ae 19 value at end of year 2a oe 120 570 920 apt depreciation _ 516 200) a s i ae ES ime oo: [consumable sear ona 000 ~ 10 200) 1 234 s00 1240 200 Powered by © camScanner[5. TRADE AND OTHER RECEIVABLES | Net trade debtors - Trade debtors (204 000- 12900) Provision for bad debts (9 000 - 1 800) _ Expenses prepaid (10 440 + 18 750) Income accrued (receivable) (27 000 + 33 000 + 61 200) 6. CASH AND CASH EQUIVALENTS Fixed deposit (maturing within 12 months) Bank | Cash float Petty cash | 7. ORDINARY SHARE CAPITAL AUTHORISED 600 000 ordinary shares ISSUED 450.000 shares in issue at beginning of year | 50.000 shares issued at R7,00 each during the year 20 000 repurchased (average price R5,34 each) 480 000 shares in issue at end of year 8. RETAINED INCOME | Retained income at beginning of year Net profit after tax for the year Repurchase of 20 000 shares (R1,06 above average issue Dividends on ordinary shares Paid ~ Recommended Retained income at end of year 9. TRADE AND OTHER PAYABLES | Trade creditors (155 830 ~ 7 800) | Expenses accrued (payable) (30 000 + 240 000) _ | Income received in advance (Deferred) Creditors for salaries (35 040 + 14 238) | Pension fund (13 260 + 1 530 + 3.060) _ | Medical Aid fund (5 250 + 960 +1920) | SA Revenue Services (PAYE) (13 950 + 3 672) - ‘SA Revenue Services (Income tax) (135 600 ~ 127 800) | Shareholders for dividends. —_—____| 77336 600 741 310 241 310] 29 190 121 200 [334 290_| ee | 225 000 23 600 3.000 1200 252 800 2.320000 __ 350 000 (406 800) 2.563 200 519 000 316 400 (21.200) 346 000) 130.000 216 000 — price) 3.16.3 | As a shareholder, what items would you q three items. Explain, quoting figures to suj Learners may provide a variety of opinions. Advise them to focus on major items, e.g. Directors fees of R1 205 000 are higher than total salaries. Stock levels are very high at R1 234 800 — it might not be Vehicles are very high — cost price R1 087 000 ~ these vehi is very high, affecting profits negatively by R245 450, juery in the fin: nei = rt Your areancial statements? Provide easy to sell all this stock quickly, Powered by (9 CamScanner icles might not be necessary and the depreciation