Financial Statement Presentation Kool Klothes Ltd

Question: Discuss about the Financial Statement Presentation Kool Klothes Ltd. Answer: Particulars Amount Amount Amount ASSETS Current assets Receivables and inventory $ 190,000 (-) Allowance for doubtful debts $ (5,000) $ 185,000 Advertising costs $ 16,000 Prepaid insurance $ 13,000 Work in progress $ 24,000 Cash management account $ 60,000 Raw materials $ 12,000 Cash at bank $ 84,000 $ 394,000 Non Current assets Motor vehicles $ 185,000 Patents $ 40,000 Property, plant, equipment and intangible assets $ 328,000 Shares in listed companies (at cost) $ 40,000 $ 593,000 Total assets $ 987,000 LIABILITIES Non Current Liabilities Debentures $ 80,000 Borrowings $ 120,000 Current Liabilities Dividend payable $ 25,000 Current and deferred tax liabilities $ 36,000 Accumulated depreciation - property, plant and equipment $ 48,000 Provision for annual leave $ 18,000 Accounts payable and provision for warranty $ 80,000 Total liabilities $ 407,000 Net assets $ 580,000 EQUITY Share capital - ordinary shares $ 490,000 Retained earnings $ 90,000 Total equity $ 580,000 The balance sheet has been rectified according to the AASB 101, where the certain adjustments have been conducted to remedy the wrong entries provided by the accounts trainee. Relevant adjustments have been conducted an accurate financial balance sheet has been provided in the above table (Cameron, 2014). The wrong entries that are conducted by the new trainee are depicted. The retained earnings were mainly provided in liabilities, where it should actually be listed under equity. As depicted under AASB 101 paragraph A1 retained earnings should be listed under Equity section of the balance sheet. Henderson et al., (2015) mentioned that accurate derivation of financial statement mainly help in depicting the financial position of the company to its relevant shareholders. The trainee was not able to depict relevant current and non-current section under both liabilities and assets in the balance sheet. As depicted under AASB 101 paragraph A1 the relevant accounts needs to be depicted under different sections for identifying relevant current and non-current section of the financial report. Moreover, the net asset was mainly derived by adding both total assets and total liabilities. According to the AASB 101 paragraph from A1 to A5, the accountants mainly need to subtract the overall total liabilities from total assets for deriving at the net assets. The net assets should be equal to the total equity attained by the company (Tran, 2015). Furthermore, trainee in liabilities mainly listed the accounts for doubtful debts, while it should mainly be listed under assets and be deducted from receivable inventory. This section is mainly depicted under the clause of AASB 101. Reference: Cameron, R. A. (2014). Applying the Materiality Concept: The Case of Abnormal Items. Henderson, S., Peirson, G., Herbohn, K., Howieson, B. (2015).Issues in financial accounting. Pearson Higher Education AU. Tran, A. (2015). Can taxable income be estimated from financial reports of listed companies in Australia?.Browser Download This Paper.