A) STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED

30 SEPTEMBER 20X3
$'000
Revenue (227,800 + 10,000 (W3)) 237800
Cost of sales (W1) -187900
Gross profit 49900
Distribution costs -13500
Administrative expenses (W1) -16350
Finance costs (900 + 4,000 (W5) + 2,930 (W6)) -7830
Profit before tax 12220
Income tax expense (W4) -350
Profit for the year 11870
Other comprehensive income:
Gain on revaluation of land and buildings (W2) 4400
Deferred tax on gain (W4) -1100
Total other comprehensive income 3300
Total comprehensive income for the year 15170

B) STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 SEPTEMBER 20X3

Share capital Share premium Retained earning

$'000 $'000 $'000
Balance at 1 October 20X2 45000 - 19800
Share issue 800 3200
Dividend paid -2000
Total comprehensive income - - 11870
Balance at 30 September 20X3 45800 3200 29670
 W1) Expenses

Per question
Contract (W3)
Depreciation (W2) – building
– owned plant
– leased plant
Insurance provision reversal

W2) Property, plant and equipment

Land
Cost 1.10.X2 12000
Depreciation b/f
12000
Revaluation 4000
16000
Retained earning Revaluation Total Depreciation:
$'000 $'000 Building (38,400 / 16)
0 64800 Plant (48,000 × 12.5%)
4000 Leased (35,000 / 5)
-2000
3300 15170 W3) This contract is currently expected to make a profit of $5m.
3300 81970
Revenue (work certified) (10 / 25 = 40%)
Cost of sales ((14 + 6) × 40%)
Profit to date

W4)
Deferred tax balance:
On taxable temporary difference ($24m × 25%)
On revaluation (4,400 × 25%)
Liability at 30 September 20X3
Balance b/f at 1 October 20X2
Reduce balance
Income tax charge:
Provision for year
Prior year over-provision
Reduction in deferred tax balance
Deferred tax on revaluation debited to revaluation surplus
Charge for year
W5) Proceeds
Interest 10%
Balance

W6)
Cost 1.10.X1
Interest 10%
Instalment paid
Balance 30.9.X2
Interest 10%
 Cost of sales Distribution Administrative
164500 13500 16500
8000
2400
6000
7000
-150
187900 13500 16350

buildin Plant leased

48000 65700 35000
-10000 -17700 -7000
38000 48000 28000
400
38400 48000 28000

-2400
-6000
-7000

ted to make a profit of $5m.

10000
-8000
2000

e ($24m × 25%) 6000

1100
7100
8000
900

3400
-1050
-900
bited to revaluation surplus -1100
350
40000
4000
44000

35000
3500
-9200
29300
2930