2 Section A 10% Preference Share Capital Question 1 The financial year end for Specter Limited is 31 March 2022. The first draft of the financial statements were prepared on 1 April 2022. The final draft of the financial statements are to be presented on 31 May 2022 however more information has been presented which may require adjustments to the financial statements. See trial balance used to prepare the first draft of the financial statements below: Ordinary Share Capital at $1 $'000 6,000 4,250 General Reserves 400 Revaluation Reserve 80 Retained Profits as at 1 April 2021 370 10% Debentures 3,000 Cost of Sales 7,220 Sales 12,440 Other Operating Income- 115 Administrative Costs 2,490 Distribution Costs 880 PPE- Land Long Term Employee Loan Cash and Bank Inventory 10,800 1,000 3,000 890 Trade Debtors 1,200 800 Trade Creditors Provision for bad debt as at 1 April 2021- 25 The following information was obtained after the trial balance above was created: 1) Transfer General reserves $200,000 2) On March 31, 2022 there was a revaluation on the Land to $12 million. This information is not yet reflected in the accounts. 3) Auditors fees for March 2022 Financial Statements is estimated to be $120,000. Auditors fees should be classified under Administrative Costs 4) Corporation Tax was calculated by the tax auditors to be $200,000 for the year ended 31 March 2022. This amount is unpaid. 5) The terms of the Employee Loan shown in the trial balance are as follows: Interest fee loan of $2,000,000 given to employee on 1 April 2019. Loan payment of $500,000 due 1 April each year. 6) At 1 April 2021, the number of ordinary shares in issue was 6 million. On September 30, 2021, there was an issue of 1 million ordinary shares at the issue price of $3.20 per share. This transaction is not reflected in the trial balance. 7) Inflation has negatively affected the customers of company. Consultants advised Specter Limited it should have the Provision for bad debt reflect 5% of the Trade Debtors. This update to the provision for bad debt is not yet reflected in the accounts. 2021. 3 8) There is no interest accrual brought forward from prior year ended 31 March 9) Dividends paid on 31 March 2022 for ordinary shares was $250,000 and preference shares were $400,000. This payment is not yet reflected in the accounts 10) Weighted average number of ordinary shares for the year is 6,200,000 shares Required: a) Prepare the Income Statement for the year ended 31 March 2022 (15 marks) b) Prepare the Statement of Changes in Equity for the year ended the 31 March 2022 (15 marks) c) Prepare the Statement of Financial Position as at 31 March 2022 (20 marks)