3) The 180,000 total for development costs as at 1 January 2021 relates to two projects:

Project 123: completed project (balance being amortised over the period expected to benefit from it (Amount to be amortised in 2021: 15,000) = 92,000

Project 978: in progress = 108,000 (200,000)

4. 4) The research and development expenditure for the year is made up of:

   Research expenditure = 118 Development costs on Project 978 that continues to

5. satisfy the requirements in IAS 38 Intangible Assets =74 for capitalisation= 192

6. 5) On 31 December 2021 a professional valuation from Sheriff Surveyors Ltd was received for the land. Sheriff Surveyors valued the land at 3,250,000. The land was originally purchased for 2,000,000.

7. 7) The share premium account balance arose as a result of the issue during 2021 of 1,000,000 50p equity shares at 1 each. A final dividend of 10p per share is proposed. All shares qualify for the proposed final dividend.

8. 8) Tax is estimated as 25,000 and to be accounted.

Required: a) Prepare the following statements for Brands plc in respect of the year ended 31 December

2021. You should show clearly all your workings.

1. the statement of profit or loss and other comprehensive income

2. the statement of changes in equity

3. the statement of financial position

Section B - You MUST answer the question (Q11) in this section. Q11. The following balances existed in the accounting records of Brands plc. At 31 December 2021: Cr '000 Dr '000 200 2,200 850 100 260 60 200 90 1,260 660 Development costs capitalised, 1 January 2021 Freehold land at 1 January 2021 Buildings - cost - accumulated depreciation at 1 January 2021 Office equipment -cost - accumulated depreciation at 1 January 2021 Motor vehicles - cost - accumulated depreciation at 1 January 2021 Trade receivables Cash at bank Trade payables 10% debentures issued 2012 and redeemable 2024) Share capital - equity shares of 50p each Share premium account Revaluation reserve Retained earnings 1 January 2021 Sales revenue Purchases Research and development expenditure for the year Inventories 1 January 2021 Distribution costs Administrative expenses Debenture interest Interim dividend paid 920 1,000 1,500 500 150 1,322 8,550 5,210 192 890 460 1,560 50 200 14192 14192 In preparing the company's statement of comprehensive income and statement of financial position at 31 December 2021 the following further information is relevant: 1) Inventory at 31 December 2021 was 760,000. 2) Depreciation is to be provided for as follows: Land Nil Buildings 5% per annum on cost Office equipment 10% per annum, reducing balance basis Motor vehicles 20% per annum on cost Depreciation on buildings and office equipment is all charged to administrative expenses. Depreciation on motor vehicles is to be split equally between distribution costs and administrative expenses