Following information has been extracted from the draft financial statements of Marvelous Limited (ML) for the year ended 30 June 2022: Statement of financial position 2022 2021 R R Property, plant and equipment 700 000 612 000 Retained earnings 275 000 240 000 Deferred tax liability 58 000 52 000 Provision for taxation 12 000 16 000

Statement of profit or loss 2022 2021 R R Profit before taxation 65 000 85 000 Taxation 30 000 25 000 Profit after taxation 35 000 60 000

The following matters are under consideration of the management: It was identified that MLs obligation to incur decommissioning cost related to a plant has not been recognised. The plant was acquired on 1 July 2019 and had been depreciated on straight line basis over a useful life of four years. The expected cost of decommissioning at the end of the life is R50 000. Applicable discount rate is 8%. In view of significant change in the expected pattern of economic benefits from an item of the equipment, it has been decided to change the depreciation method from reducing balance to straight line. The equipment was purchased on 1 July 2020 at a cost of R80 000 having estimated useful life of 5 years and residual value of R16 000. The depreciation at the rate of 27.5% on reducing balance method is included in the above draft financial statements.

The following balances pertain to MLs statement of financial position as on 30 June 2020: R Property, plant and equipment 650 000 Retained earnings 180 000 Deferred tax liability 40 000 Provision for taxation 24 000 Applicable tax rate is 30%. Tax authorities consider decommissioning cost as an expense when paid.

Questions:

Prepare extracts from the following (including comparative figures) for the year ended 30 June 2022:

(a) Statement of financial position (10 marks)

(b) Correction of error note and changes in estimate (20 marks)