30 marks

Kaplan Ltd The following list of balances relates to Kaplan Ltd for the year ended 30 September 2014. Rs 000 Rs'000 394,800 64,000 Revenue (note 1(a) and (b)] Material purchases (note 2) Production Labour (note 2) Factory Overheads (note 2) 124,000 80,000 Distribution costs 23,200 46,400 1,200 800 50,000 44,500 Administrative expenses (note 3) Finance cost interest on debentures) Investment Income Leased property - at cost (note 2) Plant and equipment at cost (note 2) Accumulated depreciation at 1 October 2013: Leased property Plant and equipment Financial asset: equity investments (note 7) Inventory at 1 October 2013 Trade receivables Trade payables Bank overdraft 10,000 14,500 32,800 46,700 53,550 36,800 5,850 50,000 Equity shares of 20 cents each Retained earnings at 1 October 2013 6% Debentures (note 6) 33,600 20,000 566,350 566,350 Note 1 (a) On 1 October 2013, goods with an invoice value of Rs10,000,000 were sold to a long-established customer on the following terms: annual instalments of Rs2,000,000 are due each year on 30 September for 5 years from date of sale. The normal cash price of the asset is Rs10,000,000. Based on the customer's credit rating, the seller believes the buyer would be able to obtain finance at an interest rate of 10 per cent. As at 30 September 2014, the cash account had been debited with R$2,000,000 and sales had been credited with Rs2,000,000. No other entries had been made. Note 1 (b) Revenue includes goods sold and despatched in September 2014 on a 30-day right of return basis. Their selling price was R$2.4 million and they were sold at a gross profit margin of 25%. Kaplan Ltd is uncertain as to whether any of these goods will be returned within the 30-day period. Note 2 During the year Kaplan Ltd manufactured an item of plant for its own use. The direct materials and labour were Rs3 million and Rs4 million respectively. Production overheads are 75% of direct labour cost and Kaplan Ltd determines the final selling price for goods by adding up a mark-up of 40%. These manufacturing costs are included in the relevant expense items in the trial balance. The plant was completed and brought into use on 1 April 2014. = All plant and equipment is depreciated at 20% per annum using the reducing balance method with time apportionment in the year of acquisition The directors decided to revalue the leased property at cost in line with recent increases in market values. On 1 October 2013 an independent surveyor valued the leased property at Rs48 million which the directors have approved. The leased property was being depreciated over an original life of 20 years which has not changed. All depreciation is charged to cost of sales. Note 3 On 15th August 2014, Kaplan Ltd's share price stood at RS2.40 per share. On this date, the board of directors proposed and paid a dividend (mistakenly included in administrative expenses) that was computed to generate a yield of 4%. Note 4 The inventory of Kaplan Ltd at 30 September 2014 was valued at cost at Rs54.8 million. Note 5 A provision for income tax for the year ended 30 September 2014 is required. The corporation tax rate on profits is 30% Note 6 The 6% R$20,000,000 debentures were issued on 1"October 2013 at a discount of 10%. Issue costs amounted to Rs1,000,000. The debentures will be redeemed at a premium of Rs1,015,000 above par value. Interest payments (equivalent to 6% of Rs20,000,000) are effected every 30 September. The effective rate of interest is 12% per annum. The discount of Rs2,000,000 on issue together with the issue costs have been included in administrative expenses. Note 7 The equity investment had a fair value of Rs32.2 million on 30 September 2014. Required: Prepare the statement of profit and loss and other comprehensive income for the year ended 30 September 2014 and a statement of financial position as at that date in accordance with the provisions of relevant international accounting standards. Kaplan Ltd The following list of balances relates to Kaplan Ltd for the year ended 30 September 2014. Rs 000 Rs'000 394,800 64,000 Revenue (note 1(a) and (b)] Material purchases (note 2) Production Labour (note 2) Factory Overheads (note 2) 124,000 80,000 Distribution costs 23,200 46,400 1,200 800 50,000 44,500 Administrative expenses (note 3) Finance cost interest on debentures) Investment Income Leased property - at cost (note 2) Plant and equipment at cost (note 2) Accumulated depreciation at 1 October 2013: Leased property Plant and equipment Financial asset: equity investments (note 7) Inventory at 1 October 2013 Trade receivables Trade payables Bank overdraft 10,000 14,500 32,800 46,700 53,550 36,800 5,850 50,000 Equity shares of 20 cents each Retained earnings at 1 October 2013 6% Debentures (note 6) 33,600 20,000 566,350 566,350 Note 1 (a) On 1 October 2013, goods with an invoice value of Rs10,000,000 were sold to a long-established customer on the following terms: annual instalments of Rs2,000,000 are due each year on 30 September for 5 years from date of sale. The normal cash price of the asset is Rs10,000,000. Based on the customer's credit rating, the seller believes the buyer would be able to obtain finance at an interest rate of 10 per cent. As at 30 September 2014, the cash account had been debited with R$2,000,000 and sales had been credited with Rs2,000,000. No other entries had been made. Note 1 (b) Revenue includes goods sold and despatched in September 2014 on a 30-day right of return basis. Their selling price was R$2.4 million and they were sold at a gross profit margin of 25%. Kaplan Ltd is uncertain as to whether any of these goods will be returned within the 30-day period. Note 2 During the year Kaplan Ltd manufactured an item of plant for its own use. The direct materials and labour were Rs3 million and Rs4 million respectively. Production overheads are 75% of direct labour cost and Kaplan Ltd determines the final selling price for goods by adding up a mark-up of 40%. These manufacturing costs are included in the relevant expense items in the trial balance. The plant was completed and brought into use on 1 April 2014. = All plant and equipment is depreciated at 20% per annum using the reducing balance method with time apportionment in the year of acquisition The directors decided to revalue the leased property at cost in line with recent increases in market values. On 1 October 2013 an independent surveyor valued the leased property at Rs48 million which the directors have approved. The leased property was being depreciated over an original life of 20 years which has not changed. All depreciation is charged to cost of sales. Note 3 On 15th August 2014, Kaplan Ltd's share price stood at RS2.40 per share. On this date, the board of directors proposed and paid a dividend (mistakenly included in administrative expenses) that was computed to generate a yield of 4%. Note 4 The inventory of Kaplan Ltd at 30 September 2014 was valued at cost at Rs54.8 million. Note 5 A provision for income tax for the year ended 30 September 2014 is required. The corporation tax rate on profits is 30% Note 6 The 6% R$20,000,000 debentures were issued on 1"October 2013 at a discount of 10%. Issue costs amounted to Rs1,000,000. The debentures will be redeemed at a premium of Rs1,015,000 above par value. Interest payments (equivalent to 6% of Rs20,000,000) are effected every 30 September. The effective rate of interest is 12% per annum. The discount of Rs2,000,000 on issue together with the issue costs have been included in administrative expenses. Note 7 The equity investment had a fair value of Rs32.2 million on 30 September 2014. Required: Prepare the statement of profit and loss and other comprehensive income for the year ended 30 September 2014 and a statement of financial position as at that date in accordance with the provisions of relevant international accounting standards