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| Hi Hi, listed on its local stock exchange, is a retail organisation operating several retail outlets countrywide. A reorganisation of the company was started in 20X2 because of a significant reduction in profits. This reorganisation was completed during the current financial year. The trial balance for Hi at 30 September 20X3 was as follows:  Additional information provided: (i) The reorganisation expenses relate to a comprehensive restructuring and reorganisation of the company that began in 20X2. Hi's financial statements for 20X2 include a provision for reorganisation expenses of $1,010,000. All costs had been incurred by the year end, but an invoice for $65,000,received on 2 October 20X3, remained unpaid and is not included in the trial balance figures. No further restructuring and reorganisation costs are expected to occur and the provision is no longer required. (ii) Investment properties are carried in the financial statements under the fair value of IAS 40. The market value of the properties at 30 September 20X3 was $522,000. There were no additions or disposals of investment properties held during the year. (iii) On 1 November 20X3, Hi was informed that one of its credit customers, X, had ceased trading. The liquidators advised Hi that it was very unlikely to receive payment of any of the $45,000 due from X at 30 September 20X3. (iv) One of Hi's customers is suing the company for damages as a consequence of a faulty product. Legal advisers are currently advising that the probability of Hi being found liable is 75%. The amount payable is estimated to be the full amount claimed of $100,000. (v) The current tax charge for the year ended 30 September 20X3 is estimated at $1,180,000 and the deferred tax liability needs to be adjusted to $281,000 (all movement to profit or loss). (vi) The directors paid dividends amounting to 40c per share during the period. (vii) During the year, Hi disposed of old equipment for $11,000. The original cost of this equipment was $210,000 and accumulated depreciation at 30 September 20X2 was $205,000 Hi's accounting policy is to charge no depreciation in the year of disposal. There were no additions to property, plant and equipment in the year. (viii) Depreciation is charged to cost of sales using the straight-line basis on property, plant and equipment as follows: Buildings 3% Furniture and fixtures 20% (ix) On 1 April 20X3, Hi made a rights issue of 1 new share for 4 existing shares, at a price of $3. The fair value immediately before the rights issue was $4.25 per share. All the rights were taken up and all money paid by 30 September 20X3. (x) The buildings are to be revalued to their market value of $9.5m on 30 September 20X3. Ignore deferred tax effects.(a) Prepare the statement of profit or loss and other comprehensive income for Hi for the year to 30 September 20X3 and a statement of financial position at that date. (20 marks) |