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Antonia Devota

C1L013052
NEW INNOVATION MART
NOTES TO FINANCIAL STATEMENTS
31 DECEMBER 2011
1. GENERAL
a. Establishment and General Information
New Innovation Mart is a family-owned company which is located in
Adelaide, Australia. The principal business of New Innovation Mart is a
television distribution. As its specialization in television distribution, New
Innovation Mart known as the cheapest television store in South Australia.
New Innovation Mart are specialize in flat television in size 21 and 32 from
different brands. The company also offer product re-sale purpose not only to
end-users. , the company also sell it for re-sale company that buy televisions
and discount trade, 2/10, N/30.
b. Employee
New Innovation Mart has five employees which work as store manager,
sales, driver, cashier, and accounting staff. The following below is
information of New Innovation Mart employees.
N Name of Employee
Position
Salary/Week
o
1
Kevin Adam
Store Manager
750
2
Stefani Roger
Sales
500
3
Helen Jhonson
Cashier
550
4
FarhanBukhori
Accountant
650
2. SUMMARY OF SIGNIFICANTS ACCOUNTING POLICIES
The companys financial statements were prepared by the Board
of Directors and completed on 7 February 2011.
a. Basis of financial statement

The financial statements have been prepared on the accrual


basis using the historical cost concept, except for certain accounts
which are measured on the bases as described in the relevant notes
herein.
b. Transactions with related parties
Effective January 1, 2011, the Company andSubsidiaries
adopted SFAS No. 7 (Revised2010), Related Party Disclosures.
Thisrevised SFAS requires disclosure of relatedparty relationships,
transactions andoutstanding balances, including commitments,in
the consolidated financial statements. Thereis no significant
impact of the adoption of thisrevised SFAS on the Company
andSubsidiaries consolidated financial statements.
c. Inventories
Inventories are stated at the lower of cost ornet realizable
value. Cost is determined by theweighted-average method.
Allowance forinventory losses is provided to reduce thecarrying
values of inventories to their netrealizable values
2011
Beginning balance
58,055
Samsung 21
800
Samsung 32
1680
Sony 21
2400
Sony 32
5400
Toshiba 21
1720
Toshiba 32
1760
Philip 21
2870
Ending Inventories
74, 685
d. Property, plant and equipment
Property and equipment are stated at cost less
accumulated depreciation and impairment loss, if any. Such cost
includes the cost of replacing part of the property and equipment
when that cost is incurred, if the recognition criteria are met.
Likewise, when performing regular major inspections for faults is
a condition for continuing to operate an item of property and
equipment, the cost of each major inspection is recognized in the
carrying amount of the property and equipment as areplacement
if the recognition criteria aresatisfied. All other repairs and
maintenance costs that do not meet the recognition criteria are
charged directly to operations.
Fixed assets depreciation using straight line method over
the estimated useful lives of the assets as follows :
Fixed assets
years
Vehicle
10

Furniture
20
Computer and office equipment
5
Building
20
An item of property and equipment is derecognized upon
disposal or when no future economic benefits are expected from
its use or disposal. Any gain or loss arising on derecognition of
the asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset.).
The residual values, useful lives and methodsof
depreciation of property and equipment are reviewed and
adjusted prospectively, if appropriate, at each financial year end
e. Revenue and expense recognition
Effective January 1, 2011, the Company andSubsidiaries
adopted SFAS No. 23 (Revised2010), Revenue. This revised
SFAS identifies the circumstances in which thecriteria on revenue
recognition are met and,therefore, revenue may be recognized,
andprescribes the accounting treatment ofrevenue arising from
certain
types
oftransactions
and
events,
and
also
providespractical guidance on the application of thecriteria on
revenue recognition.
Revenue Revenue from sales is recognized at the time the
significant risks and rewards of ownership of the goods have
passed to the buyer, which time generally coincides with their
delivery and acceptance.
Expenses are recognized as incurred on the accrual basis
f. Good and service Tax
New innovation mart registered for Good and service tax so
company can collect PPN for transactions and added to account
receivable unless it notes that transaction is free good and
service tax. Good and service tax calculated 10% of total price
2011
GST outlays
895.00
GST collections
5,910.00
g. Financial instruments
Effective January 1, 2010, the Company adopted SFAS No.
50 (Revised 2006), Financial Instruments: Presentation and
Disclosures (SFAS No. 50R), and SFAS No. 55 (Revised 2006),
Financial Instruments: Recognition and Measurement (SFAS No.
55R), which superseded SFAS No. 50, Accounting for Certain
Investments in Securities, and SFAS No. 55 (Revised 1999)
Accounting for Derivative Instrument and Hedging Activities.
h. Daily poor bank loan
Company have a loan as much as $24.000 for 2 years with
annual interest 6%. Company should pay $2000 plus interest

monthly at the middle of the month. The calculation is 6%/12 x


the balance of daily poor bank loan
i. Trade receivable
The following is current customers who buy as credit. Company
has policy to deduct 10% of Amount purchases for these
customers because they buy the product for re-sale purpose.
Cod Customers
Addresses
Balance
e
R
Electric way
407
Payneham
Road, 2,500
001
Glynde, 5070, SA
R
Klemzig electric
44
Victoria
Street, 5,000
002
store
Klemzig, 5087, SA
R
Buy more TV
212 FiveashDr, Pasadena, 1,250
003
5042, SA
R
Cheapest buy
Melrose Shopping Centre,
004
South Rd, Melrose Park,
5039, SA
R
Better price
99 Brighton Rd, Glenelg, 7,535
005
5045, SA
16,285
j.

No
P
00
1
P
00
2
P
00
3
P
00
4

Trade payable

All of transactions related to the product purchase are creditbased purchasing. Vendors have aa different policy in giving
discount. Those vendors including discount policy can be seen as
below :
Vendors
addresses
term
balance
Matsudo electric
5 cruzon
5/10, n/45
7,350
street, north
melbourne,
3051,VI
Fairview ltd pty
ANZ building
4/5, n/30
5/60,
sydney,1001,N
SW
Plymptonnorman
707 queen
2/15,n/30
6.900
street,
melbourne,30
00, VA
Sydney tv
404 George
5/10, n/30
12.500
street, sydney
south 1231,
NSW

26, 750