following trial balance relates to Obrapa Plc at 31 December 2020: GHS000

GHS000

56,000 1, 400 30,000

10,000 24,500

800 2,600

11,500 24,500 339,650

500,950

Equity shares (of 50 pesewas each) Retained earnings (note (i))

8% convertible loan note (note (ii)) Freehold property at cost 1 January 2020

(land element GHS25 million (note (iii))) Plant and equipment at cost

Accumulated depreciation 1 January 2020 building plant and equipment

Current tax (note (iv))

Deferred tax (note (iv))

Inventory 31 December 2020 (note (v)) Trade receivables

Bank

Trade payables

Revenue

Cost of sales

Distribution costs

Administrative expenses (note (vi))

Loan interest paid (note (ii))

75,000 74,500

36,000 47,100

207,750 27,500

30,700

2,400 500,950

The following notes are relevant:

(i) An interim equity dividend of 5 pesewas per share was paid in November 2020 and charged to retained earnings. This has been recorded in the financial records.

(ii) The 8% GHS30 million convertible loan note was issued on 1 January 2020 at par. Interest is payable annually in arrears on 31 December each year. The loan note is redeemable at par on 31 December 2022 for convertible into equity shares at the option of the loan note holders on the basis of 30 equity shares for each GHS100 of loan note.

Obrapa Plcs finance director has calculated that to issue an equivalent loan note without the conversion rights it would have to pay an interest rate of 10% per annum to attract investors.

The present value of GHS1 receivable at the end of each year, based on discount rates of 8% and 10% are: 8% 10%

End of year 1 093 091

2 086 083

3 079 075

(iii) Non-current assets:

On 1 January 2020 Obrapa Plc decided for the first time to value its freehold property at its current value. A qualified property valuer reported that the market value of the freehold property on this date was GHS80 million, of which GHS30 million related to the land. At this date the remaining estimated life of the property was 20 years. Obrapa Plc does not make a transfer to retained earnings in respect of excess depreciation on the revaluation of its assets.

Plant is depreciated at 20% per annum on the reducing balance method.

All depreciation of non-current assets is charged to cost of sales.

(iv) The balance on current tax represents the under/over provision of the tax liability for the year ended 31 December 2019. The required provision for income tax for the year ended 31 December 2020 is GHS194 million. The difference between the carrying amounts of the net assets of Obrapa Plc (including the revaluation of the property in note (iii) above) and their (lower) tax base at 31 December 2020 is GHS27 million. Obrapa Plcs rate of income tax is 25%.

(v) The inventory of Obrapa Plc was not counted until 4 January 2021 due to operational reasons. At this date its value at cost was GHS36 million and this figure has been used in the cost of sales calculation above. Between the year end of 31 December 2020 and 4 January 2021, Obrapa Plc received a delivery of goods at a cost of GHS27 million and made sales of GHS78 million at a mark-up on cost of 30%. Neither the goods delivered nor the sales made in this period were included in Obrapa Plcs purchases (as part of cost of sales) or revenue in the above trial balance,

(vi) On 31 December 2020, Obrapa Plc factored (sold) trade receivables with a book value of GHS10 million to Easyfinance. Obrapa Plc received an immediate payment of GHS87 million and will pay Easyfinance 2% per month on any uncollected balances. Any of the factored receivables outstanding after six months will be refunded to Easyfinance. Obrapa Plc has derecognised the receivables and charged GHS13 million to administrative expenses. If Obrapa Plc had not factored these receivables it would have made an allowance of GHS600,000 against them.

Required:

(i) Prepare the statement of comprehensive income for Obrapa Plc for the year ended 31 December 2020;

(ii) Prepare the statement of changes in equity for Obrapa Plc for the year ended 31 December 2020;

(iii) Prepare the statement of financial position of Obrapa Plc as at 31 December 2020.