Financial Accounting
Omega Corporation, a limited company, prepares its annual financial statements at 31 December. At 31 December 2019, the company's list of account balances were as follows: NS NS Revenue 2 655 000 Purchases Inventories (1 Jan. 2019) 1 669 000 444 000 Distribution costs $14 000 Administrative expenses 345 000 Debenture interest 3 000 Rental income 48 000 Land and building at cost 840 000 Accumulated depreciation Land & building at 1 January 2019 120 000 Plant and equipment at cost 258 000 Accumulated depreciation plant & equipment at 1 January 2019 126 000 Investment property at 1 January 2019 548 000 Trade receivables 541 000 Cash and cash equivalents 32 000 Ordinary share capital 100 000 Share premium 244 000 Retained earnings 1 January 2019 753 000 Interim dividend 6 000 General reserve 570 000 Trade payables 434 000 4% Debentures (redeemable in 2025) 150 000 5 200 000 5 200 000 Additional matters to be taken into account for the preparation of the financial statements for the year ended 31 December 2019. i. Inventory at 31 December 2019 amounted to N$ 388 000 at cost ii. On 1 January 2019, Omega Enterprises disposed of some malfunctioning equipment for N$ 7 000. The equipment had cost N$ 15 000 and had accumulated depreciation brought forward at 1 January 2019 of NS 3 000. There were no other additions or disposal to property, plant and equipment in the year. iii. The company treats depreciation on plant and equipment as a cost of sales and on land and buildings as an administrative cost. Depreciation rates as per the company's accounting policy are as follows: Buildings Straight line over 50 years Plant and equipment 20% reducing balance Omega Enterprises 's accounting policy is to charge a full year's depreciation in the year of an asset's purchase and none in the year of disposal. Omega Enterprises's land and buildings were eight years old on 1 January 2019. iv. On 31 December 2019 the company revalued its land and buildings to N$ 750 000 (including N$ 100 000 for the land). V. The income tax charge for the year is estimated at N$ 29 000. vi. Included in sales is N$ 7 000 pertaining to sale of equipment. vii. Debenture interest is still outstanding. REQUIRED 1. Prepare the Statement of Profit or Loss and other comprehensive incomes for the year ended 31 December 2019 in accordance with International financial reporting standards (IFRS) and Companies Act 28 of 2004 (comparative information NOT required). 2. Prepare the Statement of Financial Position as at 31December 2019 in accordance with International financial reporting standards (IFRS) and Companies Act 28 of 2004 (comparative information NOT required)
