STATEMENT OF FINANCIAL POSITION

The following trial balance relates to Weiser at 31 December 20X8:
$000 $000
Revenue 190,000
Cost of sales 130,000
Distribution costs 7,100
Administrative expenses 23,200
Loan interest 400
Building – cost (note (i)) 25,000
Accumulated depreciation at 1 January 20X8 5,000
Plant and equipment at cost (note (i)) 22,250
Accumulated depreciation at 1 January 20X8 7,250
Inventory 27,400
Trade receivables 16,500
Trade payables 13,500
Bank 1,100
Equity shares of 50 cents each 30,000
Retained earnings 1 January 20X8 4,150
Deferred tax 1,350
Current tax 500
–––––– ––––––
252,350 252,350

The following information is relevant:
(i) The directors had the building valued at $24 million on 1 January
20X8 by an independent surveyor. The directors wish to
incorporate this value into the financial statements. The building
was originally purchased 4 years ago and is being depreciated
over its original useful life of 20 years which has not changed as a
result of the revaluation. Weiser does not make a transfer to
retained earnings in respect of excess amortisation. The
revaluation gain will create a deferred tax liability (see note (ii)).
Plant and equipment is being depreciated at 20% per annum on a
reducing balance basis. All depreciation/amortisation should be
charged to cost of sales.
(ii) A provision for income tax for the year ended 31 December 20X8
of $12 million is required. At 31 December 20X8, the tax base of
Weiser’s net assets was $7 million less than their carrying
amounts. This excludes the gain on the revaluation of the building.
The income tax rate of Weiser is 30%.

ANS
Current assets
Inventory 27,400
Receivables 16,500
–––––– 43,900
Good day,I don’t understand why the bank value of 1,100 was excluded from the current assets.I’ll appreciate if you can explain better