age 100 ASSIGNMENT QUESTION The Trial Balance for Africa Trading (Pty) Limited, as at 31 July 2019. is shown below DR CR Africa Limited: Trial Balance as on 31 July 2019 Note E million E million Revenue 1,200 Cost of Sales 700 Distribution costs 86 Administration expenses 259 Land & Buildings at valuation 750 Accumulated depreciation at 1 August 2018 - buildings 60 Plant & equipment at cost 475 Accumulated depreciation at 1 August 2018 - plant & equipment ) 175 Intangible assets at cost (iv) Financial assets 260 Inventory at 31 August 2019 140 Trade receivables 194 Cash at back 20 Trade payables 244 Equity shares of El each 500 Share premium account 400 Revaluation surplus 40 Retained emings reserve 344 Investment income 22 Equity investment reserve (V) 71 Provision for warranty costs (vi 18 3.074 3,074 The following notes are to be taken into account insofar as they are relevant: Revenue includes E40 million of goods sold to various customers on a sale or return basis. These goods are not yet paid for. Payment is due only if the customer sells on the goods before 31 October 2010. If this is not the case, they are to be returned to Africa Trading (Pty) Limited undamaged. The average mark-up on these goods is 25% of cost. (i) Land and buildings were last revaled on 1 August 2014, when the land was valued at E150 million, and the buildings at E500 million. A loss of E50 million was charged to profit or loss in respect of the land as a result of that revaluation. A further revaluation exercise took place on 31 July 2019, resulting in a value of E180 million for the land and E580 million for the buildings Land and buildings are treated as a single asset for the purpose of revaluations. The existing revaluation surplus on the trial balance relates solely to plant and equipment No revaluation of plant or equipment was deemed necessary during the curent year. The company treats depreciation as a charge to cost of sales. Africa Trading Pty) Limited has not yet charged depreciation for the year to 31 July 2019. (in) Africa Trading (Pty) Limited depreciates plant and equipment at 20%, using the reducing balance basis 3 (iv) The intangible assets on the trial balance comprise several ongoing projects, some of which were launched on the market during the year. These represent E30 million of the total balance. Africa Trading (Pty) Limited wishes to amortise these over 5 years on a straight line basis. applying a full year's charge in the current year. Further development costs of E12 million are included in administration expenses. These meet the criteria for capitalisation as . an intangible asset. No amortisation should be charged except as indicated above (v) The financial assets represent equity investments. These had a fair value of E310 million at 31 July 2019, which has not yet been incorporated into the financial statements. Africa Trading (Pty) Limited has made an irrevocable election to take all fair value gains and losses on equity investments to other comprehensive income" as permitted by IFRS 9 - Financial Instruments. (vi) Africa Trading (Pty) Limited offers a 12-month warranty on all goods sold to retail customers and maintains a provision for the expected cost of honouring this warranty: At 31 July 2019, Africa has estimated the cost of honouring this warranty over the next 12 months to be E23 million. All costs are expected to be incurred within 12 months. (vii) The corporation tax charge for the year has been estimated at E29 million. Imore the taxation effects of any adjustments you make. REQUIREMENT: Prepare the following for Africa Trading (Pty) Limited a) The Statement of Profit or Loss and Other Comprehensive Income for year ended 31 July 2019 () The Statement of Changes in Equity for year ended 31 July 2019. C) The Statement of Financial Position as at 31 July 2019. age 100 ASSIGNMENT QUESTION The Trial Balance for Africa Trading (Pty) Limited, as at 31 July 2019. is shown below DR CR Africa Limited: Trial Balance as on 31 July 2019 Note E million E million Revenue 1,200 Cost of Sales 700 Distribution costs 86 Administration expenses 259 Land & Buildings at valuation 750 Accumulated depreciation at 1 August 2018 - buildings 60 Plant & equipment at cost 475 Accumulated depreciation at 1 August 2018 - plant & equipment ) 175 Intangible assets at cost (iv) Financial assets 260 Inventory at 31 August 2019 140 Trade receivables 194 Cash at back 20 Trade payables 244 Equity shares of El each 500 Share premium account 400 Revaluation surplus 40 Retained emings reserve 344 Investment income 22 Equity investment reserve (V) 71 Provision for warranty costs (vi 18 3.074 3,074 The following notes are to be taken into account insofar as they are relevant: Revenue includes E40 million of goods sold to various customers on a sale or return basis. These goods are not yet paid for. Payment is due only if the customer sells on the goods before 31 October 2010. If this is not the case, they are to be returned to Africa Trading (Pty) Limited undamaged. The average mark-up on these goods is 25% of cost. (i) Land and buildings were last revaled on 1 August 2014, when the land was valued at E150 million, and the buildings at E500 million. A loss of E50 million was charged to profit or loss in respect of the land as a result of that revaluation. A further revaluation exercise took place on 31 July 2019, resulting in a value of E180 million for the land and E580 million for the buildings Land and buildings are treated as a single asset for the purpose of revaluations. The existing revaluation surplus on the trial balance relates solely to plant and equipment No revaluation of plant or equipment was deemed necessary during the curent year. The company treats depreciation as a charge to cost of sales. Africa Trading Pty) Limited has not yet charged depreciation for the year to 31 July 2019. (in) Africa Trading (Pty) Limited depreciates plant and equipment at 20%, using the reducing balance basis 3 (iv) The intangible assets on the trial balance comprise several ongoing projects, some of which were launched on the market during the year. These represent E30 million of the total balance. Africa Trading (Pty) Limited wishes to amortise these over 5 years on a straight line basis. applying a full year's charge in the current year. Further development costs of E12 million are included in administration expenses. These meet the criteria for capitalisation as . an intangible asset. No amortisation should be charged except as indicated above (v) The financial assets represent equity investments. These had a fair value of E310 million at 31 July 2019, which has not yet been incorporated into the financial statements. Africa Trading (Pty) Limited has made an irrevocable election to take all fair value gains and losses on equity investments to other comprehensive income" as permitted by IFRS 9 - Financial Instruments. (vi) Africa Trading (Pty) Limited offers a 12-month warranty on all goods sold to retail customers and maintains a provision for the expected cost of honouring this warranty: At 31 July 2019, Africa has estimated the cost of honouring this warranty over the next 12 months to be E23 million. All costs are expected to be incurred within 12 months. (vii) The corporation tax charge for the year has been estimated at E29 million. Imore the taxation effects of any adjustments you make. REQUIREMENT: Prepare the following for Africa Trading (Pty) Limited a) The Statement of Profit or Loss and Other Comprehensive Income for year ended 31 July 2019 () The Statement of Changes in Equity for year ended 31 July 2019. C) The Statement of Financial Position as at 31 July 2019