2,400,000 3.41 6,800,000 700.000 65.000.000 100,000,000 12.000.000 44,000,000 8,000,000 10,000,000 7,500,000 Trade payables Trade receivables Provision for bad debts Land Buildin Fixtures Equipment Accumulated depreciation: Building Accumulated depreciation Factures Accumulated depreciation Equipment Inventory Underprovision of tax Deferred tax liability Revenues Hevaluation reserves Ordinary share capital 52 Redeemable preference share capital Retained earning Administrative expenses Operating expenses Cost of sales 18,600,000 300,000 21.200.000 526,000,000 6,500,000 5.000.000 7.500.000 2.000.000 42,000,000 11.700,000 215.000.000 597,800.000 597 800.000 The following details are deemed relevant to the preparation of the site in STREET The following details are deemed relevant to the preparation of the draft financial statements: Property, plant and equipment At the end of the financial year, land was revalued to $80 million. No revaluation adjustment has been booked to date. Any deferred tax implications associated with the revaluation are to be ignored. The building is depreciated on a straight line basis over a period of 40 years to a nil residual value, with depreciation charges allocated to administrative expenses. Fixtures are depreciated over ten years on a straight line basis to a nil residual value, while equipment is depreciated at a rate of 15% on the reducing balance. Depreciation of fixtures is to be charged to administrative expenses, while depreciation of equipment is to be charged to operating expenses. Included in cost of sales is the purchase of a motor vehicle for $8 million on October 1, 2020. All motor vehicles are depreciated over five years using the straight line basis to a nil residual value, with the charges being allocated to operating expenses. Management is yet to book depreciation on any of the non- current assets in the current year. Intangible assets Included in cost of sales is the cost incurred to acquire a patent on January 1, 2021. The patent cost $35 million and it is expected to have a useful life of 20 years. Any amortisation of the patent is to be computed on a straight line basis to a nil residual value and charged to cost of sales. Receivables Management adjusted its doubtful debts to 15% of the current trade receivables balance. Any movement in the provision for bad debts is to be charged to administrative expenses. Financing The entity made a new ordinary share issue of one share for every five presently outstanding on February 1, 2021 at the full market price of $1.25 each. The current par value of each ordinary share is $0.50. To date, the issue of shares has not been recorded by management. Dividends on the redeemable preference shares were declared on March 31, 2021, but remains unrecorded. The payment date is expected to be two months after the date of declaration, No ordinary dividends have been declared for the period. Taxation The entity has provided for current taxes to the tune of $13.8 million. Accumulated taxable temporary differences at the year end amounted to $72 million. The current income tax rate is 25%. The adjustments relating to tax are yet to be made. REQUIRED: Prepare the statement of profit or loss and other comprehensive income for the year ended March 31, 2021 2,400,000 3.41 6,800,000 700.000 65.000.000 100,000,000 12.000.000 44,000,000 8,000,000 10,000,000 7,500,000 Trade payables Trade receivables Provision for bad debts Land Buildin Fixtures Equipment Accumulated depreciation: Building Accumulated depreciation Factures Accumulated depreciation Equipment Inventory Underprovision of tax Deferred tax liability Revenues Hevaluation reserves Ordinary share capital 52 Redeemable preference share capital Retained earning Administrative expenses Operating expenses Cost of sales 18,600,000 300,000 21.200.000 526,000,000 6,500,000 5.000.000 7.500.000 2.000.000 42,000,000 11.700,000 215.000.000 597,800.000 597 800.000 The following details are deemed relevant to the preparation of the site in STREET The following details are deemed relevant to the preparation of the draft financial statements: Property, plant and equipment At the end of the financial year, land was revalued to $80 million. No revaluation adjustment has been booked to date. Any deferred tax implications associated with the revaluation are to be ignored. The building is depreciated on a straight line basis over a period of 40 years to a nil residual value, with depreciation charges allocated to administrative expenses. Fixtures are depreciated over ten years on a straight line basis to a nil residual value, while equipment is depreciated at a rate of 15% on the reducing balance. Depreciation of fixtures is to be charged to administrative expenses, while depreciation of equipment is to be charged to operating expenses. Included in cost of sales is the purchase of a motor vehicle for $8 million on October 1, 2020. All motor vehicles are depreciated over five years using the straight line basis to a nil residual value, with the charges being allocated to operating expenses. Management is yet to book depreciation on any of the non- current assets in the current year. Intangible assets Included in cost of sales is the cost incurred to acquire a patent on January 1, 2021. The patent cost $35 million and it is expected to have a useful life of 20 years. Any amortisation of the patent is to be computed on a straight line basis to a nil residual value and charged to cost of sales. Receivables Management adjusted its doubtful debts to 15% of the current trade receivables balance. Any movement in the provision for bad debts is to be charged to administrative expenses. Financing The entity made a new ordinary share issue of one share for every five presently outstanding on February 1, 2021 at the full market price of $1.25 each. The current par value of each ordinary share is $0.50. To date, the issue of shares has not been recorded by management. Dividends on the redeemable preference shares were declared on March 31, 2021, but remains unrecorded. The payment date is expected to be two months after the date of declaration, No ordinary dividends have been declared for the period. Taxation The entity has provided for current taxes to the tune of $13.8 million. Accumulated taxable temporary differences at the year end amounted to $72 million. The current income tax rate is 25%. The adjustments relating to tax are yet to be made. REQUIRED: Prepare the statement of profit or loss and other comprehensive income for the year ended March 31, 2021