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 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 Notes ASSETS Non-current assets Current assets Inventories Account receivables Cash and cash equivalents TOTAL ASSETS EQUITY AND LIABILITIES Capital and reserves Ordinary share capital (400 000 ordinary shares) Non-distributable reserve: Profit on sale of land 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 6 7 8 2 3 2020 Notes 316 200 93 000 61 300 25 800 5.900 409 200 381 000 214 000 6.000 50 000 11000 100 000 0 0 28 200 24 200 0 4000 409 200 2021 2020 239 000 (194000) 45 000 (9 500) 35 500 281 000 34 000 28 000 6000 315 000 192 500 105 000 0 30.000 17500 40 000 100 000 100 000 22 500 17.400 2100 3000 315 000 FACULTY OF COMMERCE, MANAGEMENT AND LAW JUDAY Premier Suites Ltd Notes to the financial statements for the year ended 31 December 2020 6. Cost Property, Plant and Equipment Land and buildings Plant and machinery Vehicles Furniture and fittings 2020 Balance at 1 January 2020 Profit for the year Dividends declared New shares issued Profit on sale of land i Share issue expenses Inter-reserve transfer Balance 31 December 2020 268 100 58 700 18 000 5 000 349 800 Share capital 2019 105 000 110 000 (1000) Premier Suites Ltd Statement of changes in equity for the year ended 31 December 2020 Ordinary Preferenc Profit on e share capital 214 000 1300 4. Dividends declared consists of: Ordinary dividends 242 100 34 000 18 000 5 000 299 100 Preference dividends 2020 40 000 60 000 Accumulated depreciation 100 000 0 21 600 9000 3 000 33 600 N$10 000 NS 6 000 2019 expropria tion of land 6 000 0 11600 4 500 2000 18 100 6 000 General reserve 30 000 20 000 50 000 Carrying value 2020 268 100 37 100 9000 2000 316 200 Retained earnings 2019 17500 35 500 (16 000) (6 000) (20 000) 242 100 22 400 13 500 3.000 281 000 Total 192 500 35 500 (16 000) 170 000 Additional information: 1. Favorable market conditions enabled the company to place 200 000 ordinary shares privately with institutional investors at 55c per share and also to issue 60 000 6% preference shares to the public at N$1 per share. The issue of new shares was to redeem the mortgage debentures The company paid share issue expenses of N$1 000 and this amount was written off at 31 December 2020. 2. The company had sold a small plot in December 2020. The cost of the land disposed of was N$4 000 (No other fixed assets were sold or scrapped during the year) 3. Included in the profit before taxation is interest paid of N55 400, and interest received of NS (1.000) 11 000 381 000 20 FACULTY OF COMMERCE, MANAGEMENT AND LAW REQUIRED: 3.1 3.2 TOTAL Prepare a statement of Cash Flow of Premier Suites Ltd for the year ended 31 December 2020 to comply with the requirements of IAS 7. Using the direct method. Prepare the following notes to comply with the requirements of IAS 7 and Companies Act 24 of 2008: 3.2.1 Reconciliation of the profit before tax to cash generated from operating activities. 3.2.2 Accounting policy and notes for cash and cash equivalent MARKS 25 5 5 35 21