The following trial balance has been extracted from the books of Hoodurz as at 31 March 2006: The…
The following trial balance has been extracted from the books of Hoodurz as at 31 March 2006:
The following information is relevant:
(i) The trial balance figures include the following amounts for a disposal group that has been classified as ‘held for sale’ under IFRS 5 Non-current Assets Held for Sale and Discontinued Operations:
The disposal group had no inventories at the date classified as ‘held for sale’.
(ii) Inventories (excluding the disposal group) at 31.3.2006 were valued at $160,000.
(iii) The depreciation charges for the year have already been accrued.
(iv) The income tax for the year ended 31.3.2006 is estimated to be $74,000. This includes $14,000 in relation to the disposal group.
(v) The provision for warranty claims is to be increased by $16,000. This is classified as administration expense.
(vi) Staff bonuses totalling $20,000 for administration and $20,000 for distribution are to be accrued.
(vii) The property was acquired during February 2006; therefore, depreciation for the year ended 31.3.2006 is immaterial. The directors have chosen to use the fair value model for such an asset.
The fair value of the property at 31.3.2006 is $280,000.
Required: Prepare for Hoodurz:
(a) an income statement for the year ended 31 March 2006; and
(b) a balance sheet as at 31 March 2006.
Both statements should comply as far as possible with relevant International Financial Reporting Standards. No notes to the financial statements are required nor is a statement of changes in equity, but all workings should be clearly shown.