CHAPTER 8 Analysis and interpretation of financial statements 3618.3 Below are data extracted from the statement of profit or loss of Wall Art Ltd over a number
of years. LO4, 5, 6, 7
Wall Art Ltd
Statement of profit or loss
2016 2015 2014 2013 2012
Sales revenue
Cost of sales$ 115 750
60 750$ 117 564
61 257$ 88 263
44 542$ 93 575
48 671$ 85 651
41 275
Gross profit 55 000 56 307 43 721 44 904 44 376
Selling expenses
Marketing expenses
Distribution expenses
Administration expenses(7 451
(5 872
(6 894
(4 751)
)
)
)(7 158
(6 150
(5 214
(4 000)
)
)
)(6 581
(5 568
(4 897
(3 596)
)
)
)(6 224
(5 674
(4 764
(3 650)
)
)
)(5 941
(5 275
(4 617
(3 700)
)
)
)
Profit before tax and finance costs
Finance costs
Finance income30 032
(12 500
8 500)33 785
(11 250
7 300)23 079
(7 650
5 800)24 592
(8 320
6 100)24 843
(8 635
4 700)Net finance income/(cost) (4 000) (3 950) (1 850) (2 220) (3 935)
Profit before tax
Income tax (30%)26 032
(7 810)29 835
(8 951)21 229
(6 369)22 372
(6 712)20 908
(6 272)
Profit after tax $ 18 822 $ 20 884 $ 14 860 $ 15 660 $ 14 636The comparative balance sheet for financial year 2016 is as follows.
Wall Art Ltd
Balance sheet as at 31 December 2016
2016 2015
Current assets
Cash and cash equivalents
Account receivable
Inventories
Other current assets$ 14 500
21 750
24 625
10 458$ 12 451
23 675
18 454
9 475
Total current assets 71 333 64 055
Non-current assets
Property, plant and equipment
Agricultural assets
Intangible assets45 000
20 532
25 12039 850
22 400
21 863
Total non-current assets 90 652 84 113
Total assets 161 985 148 168
Current liabilities
Account payable
Short-term borrowings28 450
25 60022 642
23 800
Total current liabilities 54 050 46 442
Non-current liabilities
Long-term borrowings
Deferred tax liabilities42 750
15 86246 210
25 644
Total non-current liabilities 58 612 71 854
Total liabilities 112 662 118 296
Net assets 49 323 29 872
Equity
Issued capital
Retained earnings35 000
14 32320 000
9 872
Total equity $ 49 323 $ 29 872