Question

Refrence

Deegan. (2016). Financial Accounting . McGraw-Hill Education, Australia

Milk Park Ltd is retailing company which commenced operations on the 1st of July 2018. At the financial year end 30th June 2019, the firm furnished its statement of comprehensive income and the statement of financial position as follows: Statement of Comprehensive Income for the year ended 30 June 2019 2$ 2$ 1,144,000 (475,500) 668,500 85,000 753,500 Sales Revenue Cost of sales Gross profit Other income: interest income Less operating expenses: Administrative expenses Wages and salaries Warranty expenses Long service leave expenses Doubtful debt 143,320 80,180 27,000 55,000 18,000 65,400 88,500 94,000 Insurance expense Utilities expenses Depreciation expense Profit before tax 571,400 182,100 Statement of Financial Position as at 30th June 2019 Non-current asset: Plant and Machinery - cost Less accumulated depreciation Land – fair value 564,000 94,000 470,000 125,000 595,000 Current assets: Cash 105,000 65,000 230,000 31,700 431,700 Inventory Account receivable - net Insurance prepaid Current Liabilities: Account payable 156,000 28,200 27,000 15,000 38,500 Accrued wages and salaries Provision for warranty expenses Provision for long servi Rent income paid in advance Net working capital leave (264,700) 167,000 762,000 Non-current liabilities: Loan payable (163,500) Net assets 598,500

Answer 1

Statement of Income and Reconciliation of Taxable Income                  
                      
As per Books   As per Tax Laws  
   Descriptions           (Amounts in $)   (Amounts in $)   Difference
Sales Revenue 1144000 1144000 0
Less:- Cost of Sales 475500 475500      0
Gross Profit   668500 668500 0
   Other Income                  
   Interest Income 46500 85000 -38500
   Revaluation Profit 25000 25000 0
   Total Income 740000 778500 -38500
  
Less:-   Operating Expenses   
   Administration Expenses     143320 143320 0
   Wages and Salaries 80180 51980 28200
   Warranty Expenses 27000 0 27000
   Long services Leave 55000 40000   15000
   Doubtful Debt 18000 0   18000
   Insurance Expenses           65400 31700   33700
   Utilities Expenses 88500 88500   0
   Depreciation Exp. 94000 141000   -47000
   Total           571400   496500   74900
                      
   Profit Before Tax           168600   282000   -113400
   TAX @ 30%           50580   84600   -34020