ABC Limited is a public listed company dealing with fast moving consumer goods. The authorized share capital consists of 5 000 000 equity shares of no par value of which 1 500 000 shares had already been issued.

ABC Limited

Trial Balance as at 28 February 2020

DEBIT N$ CREDIT N$ Equity share capital 2 000 000 Retained earnings 625 000 Revaluation surplus 80 000 Dividend 50 000 Land and buildings-cost 4 070 000 Accumulated depreciation-building 640 000 Equipment at cost 250 000 Accumulated depreciation-Equipment 100 000 Long term loan 550 000 Inventory 129 000 Accounts receivable 131 000 Accounts payable 70 500 Bank 65 500 Sales 5 250 000 Cost of sales 3 750 000 Finance costs 70 000 Salaries and wages 606 000 Depreciation 130 000 Advertising 10 000 Sales commission 15 000 Telephone expenses 13 500 Electricity 25 500

9 315 500 9 315 500 Additional information:

1. Property, plant and equipment is depreciated using straight line method. The amount for depreciation is to be allocate as follows: (i) Buildings N$ 80 000 and (ii) Equipment N$ 50 000

2. The amount of dividend relates to what was declared and paid during the year. Page 19 of 24

3. The property is used for all major business operations. The buildings which costs N$ 4 000 000 on 1 March 2019 were valued on 28 February 2020 to fair value of N$ 3 360 000. The office block occupies 60% of the buildings and the rest is occupied by the warehouse.

4. The equipment is shared by both administrative and sales personnel to dispatch documents to third parties. Any expense related thereof should allocated equally between the administrative and sales.

5. Salaries and wages amounting to N$ 321 000 was paid to office staff and the balance to sales department staff. Sales commission relates to an amount paid to sales agents.

6. N$ 7 500 of the telephone expenses was incurred by the sales employees and the remaining amount by the office staff.

7. During the year the business offered 500 000 shares for N$ 800 000.

8. The income tax expense for the year ended 28 February 2020 is N$ 176 610.

Required: 1. Prepare the statement of profit or loss and other comprehensive income for the year ended 28 February 2020 according to the function method to comply with the requirement Companies Act 71 of 2008 and IFRS. (17 marks)