Edit Question Three 8 3 The following trial balance relates to HIS GLORY LTD, a quoted company at 31st December 2007. DR CR GH GH Land and buildings (1/1/07) 130,000 Plant at cost 128,000 Depreciation of plant (1/1/07) 32,000 Investments 26,500 Cost of sales 89,200 Investment income 2,200 Distribution costs 11,000 Administrative expenses 12,500 Interest on loan paid 800 Inventory 31/12/07 37,900 Current Corporation Tax 400 Trade receivables 35,100 Revenue 180,400 Ordinary shares (issued at GHl each) 60,000 Retained earnings (1/1/07) 2% loan (2005-2010) Trade payables 25,500 80,000 34,700 Revaluation surplus arising from land & building 14,000 Deferred tax provision (1/1/07) Accruals Bank 11,200 24,000 6,600 471,000 471,000 The following notes are relevant: a. b. HIS GLORY LTD has a policy of revaluing its land and building at each year end. The valuation in the trial balance includes a land element of GH30,000. The useful life of the buildings at that date (1/1/07) was 20 years. On 31/12/07, a professional valuer valued the buildings at GH92,000 with no change in the value of the land. Depreciation of buildings is charged at 60% to cost of sales and 20% each to distribution costs and administrative expenses. During the year HIS GLORY LTD manufactured an additional plant for its operations. The details of the costs, which have been included in cost of sales in the trial balance, were: Material Cost Direct labour cost GH 6,000 4,000 8,000 Directly attributable overheads 6,000 Machine time cost C. d. The manufacture of the plant was completed on 30/06/07 and the plant was brought into immediate use, but its cost has not yet been capitalized. All plants are depreciated at 12% per annum (time apportioned where relevant) using the reducing balance method and charged to cost of sales. No non-current assets were sold during the year. The fair value of the investments held at 31/12/07 was GH27,100. The balance on taxation in the trial balance represents the over provision of the previous year's estimate. The estimated tax liability for the year ended 31/12/07 is GH18,700. e. f. At 31/12/07 there were GH40,000 of taxable temporary differences. Deferred tax provision should accordingly be adjusted to GH10,000 since deferred tax provision is at 25% of all taxable temporary differences. The directors have proposed dividend of GH0.40 per share for 2007. This is to be dealt with in the financial statements in accordance with IAS 10. Required: Prepare for HIS GLORY LTD and in accordance with the International Financial Reporting Standards (IFRS), a) An Income Statement for the year ended 31 December, 2007. b) A Statement of Financial Position as at 31 December, 2007