Marsh Ltd

Marsh Ltd
The following case information includes:
 Part A
 Statements of financial position
 Statements of comprehensive income
 Notes to financial statements

© Omega Performance Corporation. All Rights Reserved. 0915_IFRS_UK-En Marsh Ltd 1

Marsh Ltd Part A

Marsh Ltd
Statements of Financial Position
(in $000s)
As At December 31:

20Y2 20Y1
ASSETS
Current assets
Cash $ 2 $ 10
Marketable securities 17 13
Accounts receivable 226 170
Inventory 300 240
Prepaid expenses 18 16
Other current assets 27 15
Total current assets 590 464

Fixed assets
Plant and equipment 160 140
Less: Depreciation 80 70
Net fixed assets 80 70

Other noncurrent assets 2 2

Intangibles 10 12

TOTAL ASSETS $ 682 $ 548

LIABILITIES AND EQUITY

Current liabilities
Short-term debt $ 10 $ 0
Current portion—LTD 7 0
Accounts payable 120 110
Accrued expenses 20 18
Taxes payable 8 18
Total current liabilities 165 146

Long-term debt 21 0

Deferred taxes 2 1

Equity
Share capital 180 120
Retained earnings 314 281
Total equity 494 401

TOTAL LIABILITIES AND EQUITY $ 682 $ 548

The notes that follow are an integral part of these financial statements.

2 Assessment Casebook 0915_IFRS_UK-En ACB.MARSH.0915.CLB-IFRS.UK-En.doc

Marsh Ltd Part A

Marsh Ltd
Statements of Comprehensive Income
(in $000s)
Years Ended December 31:

20Y2 20Y1

Sales $ 2,200 $ 2,050

Cost of goods sold 1,700 1,600
Gross profit 500 450

Operating expenses
Accounting 11 10
Depreciation 10 9
Insurance 16 14
Office supplies 19 18
Provision for doubtful accounts 24 20
Rent 15 14
Salaries and wages 280 220
Selling and marketing 30 22
Delivery 20 18
Heat, light, and power 12 11
Amortization of patent rights 2 2
Total operating expenses 439 358

Net operating profit 61 92

Other income (expenses) (20) 0

Loss on sale of investments 0 (4)

Income before taxes $ 41 $ 88

Taxation 8 18

Net income $ 33 $ 70

© Omega Performance Corporation. All Rights Reserved. 0915_IFRS_UK-En Marsh Ltd 3

Marsh Ltd Part A

Notes to Financial Statements

Note 1
Sales are recognized at time of delivery and are shown net of 20Y2 sales returns totaling $10,000.
Note 2
Marketable securities are shown at market value.
Note 3
Intangibles, including patents and copyrights, are amortized over a period of 10 years, corresponding
to their useful life.
Note 4
Inventory is shown at the lower of cost or market applied on a first-in, first-out basis (FIFO).
Note 5
Accounts receivable are shown net of an allowance for uncollectible accounts of $15,000 in 20Y1
and $20,000 in 20Y2.
Note 6
Other current assets consist of loans to employees of the company. These loans are to be repaid in
20Y3.
Note 7
Short-term debt: the amount shown is repayable on demand.
Note 8
Long-term debt consists of equipment loans for the purchase of new conveyor lines. Principal is
payable over four years as follows:
20Y3 $7,000
20Y4 $7,000
20Y5 $7,000
20Y6 $7,000
Note 9
Deferred tax: Provision is made for deferred tax resulting from depreciation differences between
book and tax accounting. Depreciation is calculated using straight line or declining balance methods
where appropriate.

4 Assessment Casebook 0915_IFRS_UK-En © Omega Performance Corporation. All Rights Reserved.