INSTRUCTIONS: - Groups must consist of a minimum of four (4) and a maximum of six (6) students. - The assignment should be submitted via Moodle by 11:59pm on Sunday, December 4,2022. - Late and/or incomplete submissions will attract a penalty of a 20% reduction in score for each calendar day or part thereof that the full assignment is outstanding. - The assignment and all required attachments must be submitted in a single PDF document. Other file types will not be accepted. Multiple files/documents will also not be accepted. - Times New Roman font, size 12, with single line spacing should be used. - Marks will be deducted for poor formatting and presentation. - All workings, schedules, journal entries, and explanations must be shown as appropriate. - A project management report must be submitted along with the assignment. This should clearly indicate the specific tasks completed by each group member. - Each group member must complete and sign a declaration of authorship form. All forms must be submitted along with the assignment. - All group meetings must be recorded, and copies of all contributions or submissions made by each group member must be retained until grading is complete. Group meeting recordings and evidence of individual contributions may be requested at any point during the grading process, and must be produced if required, otherwise, individual members or the group as a whole may be awarded a zero for failure to justify their work. - Where specific group members have failed to contribute equally or at all to the completion of the assignment, the students in question are to be reported to the lecturer so their grade may be adjusted accordingly. This report should be presented in the form of a letter signed by all other group members, with appropriate evidence attached to support the allegations of non-contribution. The students in question should also be advised beforehand that a report will be made against them. - All group members will be held jointly liable for the output submitted by the group, and so each group member is responsible for ensuring that what is submitted is consistent with their individual inputs. - Any evidence of academic misconduct will be penalised. ASSIGNMENT POINTERS: - Each and every transaction or adjustment should give rise to at least one set of journal entries (some transactions may involve multiple journals). - Journal entries must be accompanied by a narrative describing the transaction or adjustment being accounted for. - While most of the transactions outlined in the assignment have not been previously accounted for in the trial balance, there are a few pre-existing entries that will require adjustment as they may not have been treated correctly initially (i.e., the original journal entries are partially or fully incorrect, or inappropriate accounts have been used, so there will be need to reverse some pre-existing journal entries in part or in full). - Accounts for accumulated depreciation and amortisation should be held separately from the accounts for the related assets. Additionally, each asset type should have its own accumulated depreciation or amortisation account, instead of simply using a single accumulated depreciation or amortisation account for all assets. - Where it is indicated that a transaction or adjustment is to be allocated to a specific account, particularly as it relates to the assignment of expenses, those instructions must be reflected in the journal entries provided. - For the journals and financial statements, decimals are to be rounded to the nearest whole number (except in the case of the EPS), and figures are to be presented in full (i.e., no contraction to thousands, etc.). - As this is a project, additional research or reading is likely to be required. Below is the trial balance for Mediplex Ltd, a pharmaceuticals manufacturing company: Mediplex Ltd The following details are deemed relevant to the preparation of the draft financial statements which are to be presented to the entity's auditors: Property, plant and equipment The following details are deemed relevant to the preparation of the draft financial statements which are to be presented to the entity's auditors: Property, plant and equipment Subsequent to a revaluation exercise which took place on March 31, 2022, the land had a fair value of $244 million, while the building had a fair value of $837 million. The building is depreciated evenly over forty years to a nil residual value, with the charges allocated in a 3:1 ratio between administrative expenses and cost of sales. There have been no adjustments made for the revaluations in the current period, and their effects have not been included in the accumulated temporary differences noted below. The capital allowances granted on the building to date are equivalent to the accumulated depreciation charged against it. Four months into the financial year, the entity bought a motor vehicle for $11.7 million, but inadvertently recorded the debit to miscellaneous expenses. Motor vehicles are depreciated on a straight line basis over eight years to a nil residual value. All depreciation charges on motor vehicles are to be allocated to distribution costs. Additionally, management bought a conveyor system costing $13.9 million halfway through the financial year, which it is yet to record in the books. The system is comprised of two components: one of which has a useful life of 25 years, while the other component has to be replaced every eight years. The latter component accounts for 12% of the total cost of the system. Associated depreciation charges are allocated in full to distribution costs. Fixtures and fittings and machinery are to be depreciated 12% on the reducing balance and 9% on cost respectively, while equipment is to be depreciated over eight years on a straight line basis 4 down to a residual value of 10% of cost. The depreciation on fixtures and fittings is charged to other operating expenses, while for machinery as well as equipment, depreciation charges are allocated equally between cost of sales and administrative expenses. During the year, management commenced processes to sell all of its existing machinery to facilitate a major upgrade project. The sale was deemed highly probable effective July 1, 2021 when a buyer was identified. The items have a combined fair value of $99 million, with disposal costs amounting to $6.2 million. Any impairment or gain on the transaction should be recognised in other operating expenses. Included in miscellaneous expenses is a lease payment which relates to the rental of manufacturing equipment with a remaining useful life of three years. The agreement commenced on April 1, 2021, and requires that a total of five annual payments of $9.4 million are made - an eighth of which relates to maintenance expenses, and another 5% of which is attributable to insurance expenses. Maintenance and insurance expenses are ordinarily classified as other operating expenses. The lease agreement also speaks to a guaranteed residual value of $1.6 million, and permits the extension of the lease by an additional two years. Management is confident that the company should receive the intended benefits from the leased asset within the agreed period, which would negate the need to extend the contract. The incremental borrowing rate is 6%, while the interest rate implicit in the lease is 200 basis points higher. The $9.4 million payment debited to miscellaneous expenses is the only record of the lease transaction that has been made to date. Also debited to miscellaneous expenses is $0.9 million for legal fees incurred to draft the lease agreement on April 1, 2021, while a lease incentive of $550,000 which was received by cheque has yet to be recorded. Depreciation on the right of use asset is to be shared equally between cost of sales, administrative expenses, and other operating expenses. The entity prefers to show the leased asset separately within its property, plant and equipment for presentation purposes. Intangible assets Goodwill is to be impaired by 18%, with the impairment charged to other operating expenses. The patent is to be amortised over 18 years to a nil residual value, charged to other operating expenses, while the trademark and copyright are both amortised over a 13-year period, with charges going to cost of sales. Intangible assets Goodwill is to be impaired by 18%, with the impairment charged to other operating expenses. The patent is to be amortised over 18 years to a nil residual value, charged to other operating expenses, while the trademark and copyright are both amortised over a 13-year period, with charges going to cost of sales. On February 28, 2022, the entity acquired a brand for $81 million, but the transaction has not yet been recorded or otherwise accounted for in the books. The brand should be fully amortised over a 22 -year period, with charges going to cost of sales and time-apportioned as necessary. Of the total R\&D cost on record, 60% relates to research cost, while the balance relates to development. Three-eighths of the amount recognised as development cost was incurred between 5 September 1, 2021 to November 30, 2021. The product achieved commercial feasibility on December 1, 2021. Any capitalised development cost is to be amortised over twelve years and charged to cost of sales, with time apportionment where necessary. Any non-capitalised research and development cost should be charged to other operating expenses. Other liabilities The contingent liability reflected in the trial balance relates to a customer lawsuit for which the chance of payout has been deemed as possible by the entity's attorneys. The amount was recorded in other operating expenses. The entity's attorneys have also advised that another lawsuit with which the company is currently faced has a probable chance of payout of $3.6 million. This amount has not been accounted for. Similar transactions are usually recorded in other operating expenses. Neither of these transactions will have an effect on the accumulated temporary differences noted below. Debt instruments On April 1, 2021, the company issued a 6\% convertible debenture, a 0\% loan note, and a 4% debenture with effective interest rates of 8%,3%, and 6.5% respectively. The convertible debenture has a nominal value of $285 million and is redeemable at the end of the fourth year, while the loan note has a nominal value of $360 million, was issued at a 6.8% discount with issue costs of $3.243 million, and is redeemable after five years at a 7% premium. The regular debenture has a nominal value of $122 million and is redeemable after 3 years at an 8% premium. Only the coupon payment relating to the convertible debt instrument, which was incorrectly debited to miscellaneous expenses, has been recorded so far; all other relevant journal entries across the three debt issues remain unrecorded. Additionally, there are interest sums for the existing debt obligations reflected in the trial balance that remain unaccounted for at the year end. Equity and reserves The par value of each ordinary share is $0.80. On the first day of the financial year, the entity decided to make a bonus issue of three new shares for every ten existing shares held. Subsequently, there was a two for eleven rights issue on October 31,2021 at $1.35 per share. The market price per share at that date was $2.20. The bonus and rights issues have not yet been recorded. In the case of the bonus issue, management's preference is to preserve the retained 6 earnings balance insofar as is possible. Additionally, the revaluation reserve may be used only to the extent that other reserves have been exhausted. Dividends on the preference shares are currently unpaid and remain unaccounted for at the year end. An interim ordinary dividend amounting to $4.9 million was paid on January 1, 2022, but this is yet to be recorded. A further final ordinary dividend was declared on March 31,2022 for $0.03 per share held as at that date; this too is yet to be accounted for. The declared dividends were paid on August 1, 2022. A sum of $3.4 million is to be transferred from accumulated profits to the general reserves. Trade receivables Of the trade receivables figure currently reported, $2.1 million relates to a receivables balance that was already paid by the customer during the prior period, but the payment was never accounted for as the monies were stolen by an accounting clerk who has gone into hiding since. Debt instruments On April 1, 2021, the company issued a 6% convertible debenture, a 0\% loan note, and a 4% debenture with effective interest rates of 8%,3%, and 6.5% respectively. The convertible debenture has a nominal value of $285 million and is redeemable at the end of the fourth year, while the loan note has a nominal value of $360 million, was issued at a 6.8% discount with issue costs of $3.243 million, and is redeemable after five years at a 7% premium. The regular debenture has a nominal value of $122 million and is redeemable after 3 years at an 8% premium. Only the coupon payment relating to the convertible debt instrument, which was incorrectly debited to miscellaneous expenses, has been recorded so far; all other relevant journal entries across the three debt issues remain unrecorded. Additionally, there are interest sums for the existing debt obligations reflected in the trial balance that remain unaccounted for at the year end. Equity and reserves The par value of each ordinary share is $0.80. On the first day of the financial year, the entity decided to make a bonus issue of three new shares for every ten existing shares held. Subsequently, there was a two for eleven rights issue on October 31, 2021 at \$1.35 per share. The market price per share at that date was $2.20. The bonus and rights issues have not yet been recorded. In the case of the bonus issue, management's preference is to preserve the retained 6 earnings balance insofar as is possible. Additionally, the revaluation reserve may be used only to the extent that other reserves have been exhausted. Dividends on the preference shares are currently unpaid and remain unaccounted for at the year end. An interim ordinary dividend amounting to $4.9 million was paid on January 1,2022 , but this is yet to be recorded. A further final ordinary dividend was declared on March 31, 2022 for $0.03 per share held as at that date; this too is yet to be accounted for. The declared dividends were paid on August 1, 2022. A sum of $3.4 million is to be transferred from accumulated profits to the general reserves. Trade receivables Of the trade receivables figure currently reported, $2.1 million relates to a receivables balance that was already paid by the customer during the prior period, but the payment was never accounted for as the monies were stolen by an accounting clerk who has gone into hiding since. The tax effect on any adjustment to be made is to be ignored. The provision for bad debt is to be revised to 12% of the adjusted trade receivables balance. Adjustments relating to receivables are ordinarily recorded in administrative expenses. Discontinued operations Included in administrative expenses is the net result of a discontinued operation. An entire division with assets costing $542 million and accumulated depreciation of $378 million was sold for $101 million. In addition to the sale, the entity also incurred redundancy costs of $29 million. The now discontinued operation made profits of $126 million before accounting for the cost of redundancies and the sale of its assets as outlined above. The appropriate taxes on the profits for this segment were already accounted for. Inventory A final inventory count on March 31,2022 revealed that $6.8 million worth of inventory at cost had not yet been recorded. Of that amount, 7\% was found to be obsolete and should be written off. Inventory purchases are ordinarily recorded in cost of sales, but any write-offs are charged to other operating expenses. Other income For interest income, the amount shown in the trial balance represents only a half of the amount earned for the year, while royalties earned but not yet received amount to $2.2 million. accounted for as the monies were stolen by an accounting clerk who has gone into hiding since. The tax effect on any adjustment to be made is to be ignored. The provision for bad debt is to be revised to 12% of the adjusted trade receivables balance. Adjustments relating to receivables are ordinarily recorded in administrative expenses. Discontinued operations Included in administrative expenses is the net result of a discontinued operation. An entire division with assets costing \$542 million and accumulated depreciation of $378 million was sold for $101 million. In addition to the sale, the entity also incurred redundancy costs of $29 million. The now discontinued operation made profits of $126 million before accounting for the cost of redundancies and the sale of its assets as outlined above. The appropriate taxes on the profits for this segment were already accounted for. Inventory A final inventory count on March 31, 2022 revealed that $6.8 million worth of inventory at cost had not yet been recorded. Of that amount, 7% was found to be obsolete and should be written off. Inventory purchases are ordinarily recorded in cost of sales, but any write-offs are charged to other operating expenses. Other income For interest income, the amount shown in the trial balance represents only a half of the amount earned for the year, while royalties earned but not yet received amount to $2.2 million. Taxation Taxable profits reported for the current year of assessment amounted to $477 million. The overprovision on the trial balance above relates to prior year taxes which have since been paid. The entity has accumulated taxable temporary difference of $126 million, which does not include the effect of the revaluations on property, plant and equipment. The deferred tax asset currently reflected in the trial balance arose solely from transactions charged to the statement of profit or loss. The current corporation tax rate is 30%. REQUIRED: a) Prepare the statement of profit or loss and other comprehensive income for the year ended March 31, 2022 (91/2 marks) b) Prepare the statement of changes in equity for the year ended March 31, 2022 (14 marks) c) Prepare the statement of financial position as at March 31, 2022 (231 12 marks) d) Calculate the basic earnings per share for the year ended March 31, 2022 (3 marks) NB. The EPS calculations should take into account the impact of any additional shares issued during the year. e) Prepare all relevant workings and explanations, including, but not limited to: - comprehensive listing of ALL journal entries - a fixed assets schedule - an intangible assets schedule - an expense schedule - all other appropriate supporting calculations (50 marks) INSTRUCTIONS: - Groups must consist of a minimum of four (4) and a maximum of six (6) students. - The assignment should be submitted via Moodle by 11:59pm on Sunday, December 4,2022. - Late and/or incomplete submissions will attract a penalty of a 20% reduction in score for each calendar day or part thereof that the full assignment is outstanding. - The assignment and all required attachments must be submitted in a single PDF document. Other file types will not be accepted. Multiple files/documents will also not be accepted. - Times New Roman font, size 12, with single line spacing should be used. - Marks will be deducted for poor formatting and presentation. - All workings, schedules, journal entries, and explanations must be shown as appropriate. - A project management report must be submitted along with the assignment. This should clearly indicate the specific tasks completed by each group member. - Each group member must complete and sign a declaration of authorship form. All forms must be submitted along with the assignment. - All group meetings must be recorded, and copies of all contributions or submissions made by each group member must be retained until grading is complete. Group meeting recordings and evidence of individual contributions may be requested at any point during the grading process, and must be produced if required, otherwise, individual members or the group as a whole may be awarded a zero for failure to justify their work. - Where specific group members have failed to contribute equally or at all to the completion of the assignment, the students in question are to be reported to the lecturer so their grade may be adjusted accordingly. This report should be presented in the form of a letter signed by all other group members, with appropriate evidence attached to support the allegations of non-contribution. The students in question should also be advised beforehand that a report will be made against them. - All group members will be held jointly liable for the output submitted by the group, and so each group member is responsible for ensuring that what is submitted is consistent with their individual inputs. - Any evidence of academic misconduct will be penalised. ASSIGNMENT POINTERS: - Each and every transaction or adjustment should give rise to at least one set of journal entries (some transactions may involve multiple journals). - Journal entries must be accompanied by a narrative describing the transaction or adjustment being accounted for. - While most of the transactions outlined in the assignment have not been previously accounted for in the trial balance, there are a few pre-existing entries that will require adjustment as they may not have been treated correctly initially (i.e., the original journal entries are partially or fully incorrect, or inappropriate accounts have been used, so there will be need to reverse some pre-existing journal entries in part or in full). - Accounts for accumulated depreciation and amortisation should be held separately from the accounts for the related assets. Additionally, each asset type should have its own accumulated depreciation or amortisation account, instead of simply using a single accumulated depreciation or amortisation account for all assets. - Where it is indicated that a transaction or adjustment is to be allocated to a specific account, particularly as it relates to the assignment of expenses, those instructions must be reflected in the journal entries provided. - For the journals and financial statements, decimals are to be rounded to the nearest whole number (except in the case of the EPS), and figures are to be presented in full (i.e., no contraction to thousands, etc.). - As this is a project, additional research or reading is likely to be required. Below is the trial balance for Mediplex Ltd, a pharmaceuticals manufacturing company: Mediplex Ltd The following details are deemed relevant to the preparation of the draft financial statements which are to be presented to the entity's auditors: Property, plant and equipment The following details are deemed relevant to the preparation of the draft financial statements which are to be presented to the entity's auditors: Property, plant and equipment Subsequent to a revaluation exercise which took place on March 31, 2022, the land had a fair value of $244 million, while the building had a fair value of $837 million. The building is depreciated evenly over forty years to a nil residual value, with the charges allocated in a 3:1 ratio between administrative expenses and cost of sales. There have been no adjustments made for the revaluations in the current period, and their effects have not been included in the accumulated temporary differences noted below. The capital allowances granted on the building to date are equivalent to the accumulated depreciation charged against it. Four months into the financial year, the entity bought a motor vehicle for $11.7 million, but inadvertently recorded the debit to miscellaneous expenses. Motor vehicles are depreciated on a straight line basis over eight years to a nil residual value. All depreciation charges on motor vehicles are to be allocated to distribution costs. Additionally, management bought a conveyor system costing $13.9 million halfway through the financial year, which it is yet to record in the books. The system is comprised of two components: one of which has a useful life of 25 years, while the other component has to be replaced every eight years. The latter component accounts for 12% of the total cost of the system. Associated depreciation charges are allocated in full to distribution costs. Fixtures and fittings and machinery are to be depreciated 12% on the reducing balance and 9% on cost respectively, while equipment is to be depreciated over eight years on a straight line basis 4 down to a residual value of 10% of cost. The depreciation on fixtures and fittings is charged to other operating expenses, while for machinery as well as equipment, depreciation charges are allocated equally between cost of sales and administrative expenses. During the year, management commenced processes to sell all of its existing machinery to facilitate a major upgrade project. The sale was deemed highly probable effective July 1, 2021 when a buyer was identified. The items have a combined fair value of $99 million, with disposal costs amounting to $6.2 million. Any impairment or gain on the transaction should be recognised in other operating expenses. Included in miscellaneous expenses is a lease payment which relates to the rental of manufacturing equipment with a remaining useful life of three years. The agreement commenced on April 1, 2021, and requires that a total of five annual payments of $9.4 million are made - an eighth of which relates to maintenance expenses, and another 5% of which is attributable to insurance expenses. Maintenance and insurance expenses are ordinarily classified as other operating expenses. The lease agreement also speaks to a guaranteed residual value of $1.6 million, and permits the extension of the lease by an additional two years. Management is confident that the company should receive the intended benefits from the leased asset within the agreed period, which would negate the need to extend the contract. The incremental borrowing rate is 6%, while the interest rate implicit in the lease is 200 basis points higher. The $9.4 million payment debited to miscellaneous expenses is the only record of the lease transaction that has been made to date. Also debited to miscellaneous expenses is $0.9 million for legal fees incurred to draft the lease agreement on April 1, 2021, while a lease incentive of $550,000 which was received by cheque has yet to be recorded. Depreciation on the right of use asset is to be shared equally between cost of sales, administrative expenses, and other operating expenses. The entity prefers to show the leased asset separately within its property, plant and equipment for presentation purposes. Intangible assets Goodwill is to be impaired by 18%, with the impairment charged to other operating expenses. The patent is to be amortised over 18 years to a nil residual value, charged to other operating expenses, while the trademark and copyright are both amortised over a 13-year period, with charges going to cost of sales. Intangible assets Goodwill is to be impaired by 18%, with the impairment charged to other operating expenses. The patent is to be amortised over 18 years to a nil residual value, charged to other operating expenses, while the trademark and copyright are both amortised over a 13-year period, with charges going to cost of sales. On February 28, 2022, the entity acquired a brand for $81 million, but the transaction has not yet been recorded or otherwise accounted for in the books. The brand should be fully amortised over a 22 -year period, with charges going to cost of sales and time-apportioned as necessary. Of the total R\&D cost on record, 60% relates to research cost, while the balance relates to development. Three-eighths of the amount recognised as development cost was incurred between 5 September 1, 2021 to November 30, 2021. The product achieved commercial feasibility on December 1, 2021. Any capitalised development cost is to be amortised over twelve years and charged to cost of sales, with time apportionment where necessary. Any non-capitalised research and development cost should be charged to other operating expenses. Other liabilities The contingent liability reflected in the trial balance relates to a customer lawsuit for which the chance of payout has been deemed as possible by the entity's attorneys. The amount was recorded in other operating expenses. The entity's attorneys have also advised that another lawsuit with which the company is currently faced has a probable chance of payout of $3.6 million. This amount has not been accounted for. Similar transactions are usually recorded in other operating expenses. Neither of these transactions will have an effect on the accumulated temporary differences noted below. Debt instruments On April 1, 2021, the company issued a 6\% convertible debenture, a 0\% loan note, and a 4% debenture with effective interest rates of 8%,3%, and 6.5% respectively. The convertible debenture has a nominal value of $285 million and is redeemable at the end of the fourth year, while the loan note has a nominal value of $360 million, was issued at a 6.8% discount with issue costs of $3.243 million, and is redeemable after five years at a 7% premium. The regular debenture has a nominal value of $122 million and is redeemable after 3 years at an 8% premium. Only the coupon payment relating to the convertible debt instrument, which was incorrectly debited to miscellaneous expenses, has been recorded so far; all other relevant journal entries across the three debt issues remain unrecorded. Additionally, there are interest sums for the existing debt obligations reflected in the trial balance that remain unaccounted for at the year end. Equity and reserves The par value of each ordinary share is $0.80. On the first day of the financial year, the entity decided to make a bonus issue of three new shares for every ten existing shares held. Subsequently, there was a two for eleven rights issue on October 31,2021 at $1.35 per share. The market price per share at that date was $2.20. The bonus and rights issues have not yet been recorded. In the case of the bonus issue, management's preference is to preserve the retained 6 earnings balance insofar as is possible. Additionally, the revaluation reserve may be used only to the extent that other reserves have been exhausted. Dividends on the preference shares are currently unpaid and remain unaccounted for at the year end. An interim ordinary dividend amounting to $4.9 million was paid on January 1, 2022, but this is yet to be recorded. A further final ordinary dividend was declared on March 31,2022 for $0.03 per share held as at that date; this too is yet to be accounted for. The declared dividends were paid on August 1, 2022. A sum of $3.4 million is to be transferred from accumulated profits to the general reserves. Trade receivables Of the trade receivables figure currently reported, $2.1 million relates to a receivables balance that was already paid by the customer during the prior period, but the payment was never accounted for as the monies were stolen by an accounting clerk who has gone into hiding since. Debt instruments On April 1, 2021, the company issued a 6% convertible debenture, a 0\% loan note, and a 4% debenture with effective interest rates of 8%,3%, and 6.5% respectively. The convertible debenture has a nominal value of $285 million and is redeemable at the end of the fourth year, while the loan note has a nominal value of $360 million, was issued at a 6.8% discount with issue costs of $3.243 million, and is redeemable after five years at a 7% premium. The regular debenture has a nominal value of $122 million and is redeemable after 3 years at an 8% premium. Only the coupon payment relating to the convertible debt instrument, which was incorrectly debited to miscellaneous expenses, has been recorded so far; all other relevant journal entries across the three debt issues remain unrecorded. Additionally, there are interest sums for the existing debt obligations reflected in the trial balance that remain unaccounted for at the year end. Equity and reserves The par value of each ordinary share is $0.80. On the first day of the financial year, the entity decided to make a bonus issue of three new shares for every ten existing shares held. Subsequently, there was a two for eleven rights issue on October 31, 2021 at \$1.35 per share. The market price per share at that date was $2.20. The bonus and rights issues have not yet been recorded. In the case of the bonus issue, management's preference is to preserve the retained 6 earnings balance insofar as is possible. Additionally, the revaluation reserve may be used only to the extent that other reserves have been exhausted. Dividends on the preference shares are currently unpaid and remain unaccounted for at the year end. An interim ordinary dividend amounting to $4.9 million was paid on January 1,2022 , but this is yet to be recorded. A further final ordinary dividend was declared on March 31, 2022 for $0.03 per share held as at that date; this too is yet to be accounted for. The declared dividends were paid on August 1, 2022. A sum of $3.4 million is to be transferred from accumulated profits to the general reserves. Trade receivables Of the trade receivables figure currently reported, $2.1 million relates to a receivables balance that was already paid by the customer during the prior period, but the payment was never accounted for as the monies were stolen by an accounting clerk who has gone into hiding since. The tax effect on any adjustment to be made is to be ignored. The provision for bad debt is to be revised to 12% of the adjusted trade receivables balance. Adjustments relating to receivables are ordinarily recorded in administrative expenses. Discontinued operations Included in administrative expenses is the net result of a discontinued operation. An entire division with assets costing $542 million and accumulated depreciation of $378 million was sold for $101 million. In addition to the sale, the entity also incurred redundancy costs of $29 million. The now discontinued operation made profits of $126 million before accounting for the cost of redundancies and the sale of its assets as outlined above. The appropriate taxes on the profits for this segment were already accounted for. Inventory A final inventory count on March 31,2022 revealed that $6.8 million worth of inventory at cost had not yet been recorded. Of that amount, 7\% was found to be obsolete and should be written off. Inventory purchases are ordinarily recorded in cost of sales, but any write-offs are charged to other operating expenses. Other income For interest income, the amount shown in the trial balance represents only a half of the amount earned for the year, while royalties earned but not yet received amount to $2.2 million. accounted for as the monies were stolen by an accounting clerk who has gone into hiding since. The tax effect on any adjustment to be made is to be ignored. The provision for bad debt is to be revised to 12% of the adjusted trade receivables balance. Adjustments relating to receivables are ordinarily recorded in administrative expenses. Discontinued operations Included in administrative expenses is the net result of a discontinued operation. An entire division with assets costing \$542 million and accumulated depreciation of $378 million was sold for $101 million. In addition to the sale, the entity also incurred redundancy costs of $29 million. The now discontinued operation made profits of $126 million before accounting for the cost of redundancies and the sale of its assets as outlined above. The appropriate taxes on the profits for this segment were already accounted for. Inventory A final inventory count on March 31, 2022 revealed that $6.8 million worth of inventory at cost had not yet been recorded. Of that amount, 7% was found to be obsolete and should be written off. Inventory purchases are ordinarily recorded in cost of sales, but any write-offs are charged to other operating expenses. Other income For interest income, the amount shown in the trial balance represents only a half of the amount earned for the year, while royalties earned but not yet received amount to $2.2 million. Taxation Taxable profits reported for the current year of assessment amounted to $477 million. The overprovision on the trial balance above relates to prior year taxes which have since been paid. The entity has accumulated taxable temporary difference of $126 million, which does not include the effect of the revaluations on property, plant and equipment. The deferred tax asset currently reflected in the trial balance arose solely from transactions charged to the statement of profit or loss. The current corporation tax rate is 30%. REQUIRED: a) Prepare the statement of profit or loss and other comprehensive income for the year ended March 31, 2022 (91/2 marks) b) Prepare the statement of changes in equity for the year ended March 31, 2022 (14 marks) c) Prepare the statement of financial position as at March 31, 2022 (231 12 marks) d) Calculate the basic earnings per share for the year ended March 31, 2022 (3 marks) NB. The EPS calculations should take into account the impact of any additional shares issued during the year. e) Prepare all relevant workings and explanations, including, but not limited to: - comprehensive listing of ALL journal entries - a fixed assets schedule - an intangible assets schedule - an expense schedule - all other appropriate supporting calculations (50 marks)