FACULTY OF COMMERCE, MANAGEMENT AND LAW Question 3 (35 Marks) Here are the financial statements of Premier Suites Ltd on 31 December 2020 Premier Suites Ltd Abridged Statement of profit or loss& other Comprehensive Income for the year ended 31 December 2020 Revenue Notes Cost of Sales Operating profit before taxation Income tax expense Profit for the Year Premier Suites Ltd Statement of Financial position as at 31 December 2020 ASSETS Notes 2020 2021 6 316 200 2020 239 000 (194 000) 45 000 (9500) 35 500 Non-current assets Current assets Inventories Account receivables Cash and cash equivalents TOTAL ASSETS 7 8 25 800 93 000 61300 281000 34 000 28 000 6000 5900 409 200 315 000 EQUITY AND LIABILITIES Capital and reserves 381 000 192 500 Ordinary share capital (400 000 ordinary shares) 2 214 000 105 000 Non-distributable reserve: Profit on sale of land 6000 Distributable reserve: General reserve Retained earnings Preference share capital (100 000 6% convertible preference shares) Non-current liabilities 8% mortgage debentures Current liabilities Accounts payable Bank overdraft Shareholders for dividends TOTAL EQUITY AND LIABILITIES 50 000 11.000 100 000 30.000 17.500 40 000 0 100 000 3 100 000 28 200 22500 24 200 17400 0 2100 4000 3000 409 200 315 000 19