Cost of sales 46,410
Finance costs 4,050
Investment income (note (iii)) 1,520
Operating expenses (note (iii)) 20,640
Revenue (notes (i) and (ii)) 75,350
Tax (note (vi)) 130
The following notes are relevant:
1. Sander Co made a large sale of goods on 1 July 20X8, which was also the date of delivery. Under the terms of the agreement, Sander Co will receive payment of $8m on 30 June 20X9. Currently, Sander Co has recorded $4m in revenue and trade receivables. The directors intend to record the remaining $4m revenue in the year ended 31 December 20X9. The costs of this sale have been accounted for correctly in the financial statements for the year ended 31 December 20X8. Sander Co has a cost of capital of 8% at which an appropriate discount factor would be 0.9259
2. Sander Co also sold goods to an overseas customer on 1 December 20X8 for 12m Kromits(Kr). They agreed a 60‐day payment term. No entries have yet been made to record this sale, although the goods were correctly removed from inventory and expensed in cost of sales. The amount remains unpaid at 31 December 20X8.
Relevant exchange rates are:
1 December 20X8: 6.4 Kr/$
31 December 20X8: 6.0 Kr/$ (iii)
3. Sander Co acquired $9m 5% bonds at par value on 1 January 20X8. The interest is receivable on 31 December each year. Sander Co incurred $0.4m broker fees when acquiring the bonds, which has been expensed to operating expenses. These bonds are repayable at a premium so have an effective rate of 8%. Sander Co has recorded the interest received on 31 December 20X8 in investment income.
4. During the year, Sander Co revalued its head office for the first time, resulting in an increase in value of $12m at 31 December 20X8. Deferred tax is applicable to this gain at 25%
5. Sander Co values its investment properties using the fair value model. The investment properties increased in value by $4m at 31 December 20X8.
6. The tax figure in the trial balance represents the under/over provision from the previous year. The current tax liability for the year ended 31 December 20X8 is estimated to be $3.2m.
7. At 1 January 20X8, Sander Co had 30 million $1 equity shares in issue. On 1 April 20X8, Sander Co issued an additional 5 million $1 equity shares at full market value. On 1 July 20X8, Sander Co performed a 2 for 5 rights issue, at $2.40 per share. The market value of a Sander Co share at 1 July 20X8 was $3.10 per share.