K000 K000

Plant and Equipment at cost (iii) 155,500

Accumulated amortisation/ depreciation at 1 April 2021

Right of use asset 25,000

Plant and Equipment 43,500

Right of use leased property at cost 100,000

Bank interest 900

Administration expenses 36,800

Distribution costs 33,500

Cost of sales 290,600

Loan note interest and dividends paid (notes(iv) and(v) 13,380

Revenue 490,000

Inventories at 31^st March 2022 61,000

Trade received 63,000

Trade payables 32,200

Bank 5,500

Equity shares of 25ngwee each (notes ii) 56,000

Share premium 25,000

Retained earnings at 1 April 2021 26,080

5% convertible loan note (note iv) 50,000

Current tax note (vi) 3,200

Deferred tax (note (vi) 4,600

757,880 757,880

The following notes are relevant:

1.Revenue includes and amount of K20 million for cash sales made through Lubuto cos retail outlets during the year on behalf of francis. lubuto Co, acting as agent, is entitled to a commission of 10% of the selling price of these goods. By 31^st March 2022, Lubuto Co had remitted to Francis K15million ( of the K20 million sales) and recorded this amount in cost of sales

2.On 1^st August 2021, Lubuto Co made a fully subscribed rights issue of equity share capital based on two new shares at 60 ngwee each for every five shares held. The issue has been fully recorded in the trial balance figures.

Plant and equipment is depreciated at 12.5% per annum on the reducing balance

basis. Leased property was purchased 20yrs ago and depreciation is charged on straight line. All amortisation and depreciation of non-current assets is charged to cost of sales.

3.On 1 April 2021, Lubuto co issued a 5% K50 million convertible loan note at par. Interest is payable annually in arears on 31 March each year. The loan note is redeemable at par or convertible into equity shares at the option of the loan note holders on 31 March 2024. The interest on an equivalent loan note without the conversion rights would be 8% per annum. The present values of K1 received at the end of each year, based on discount rates of 5% and 8% are: 5% 8%

End of year 1 0.95 0.93

2 0.91 0.86

3 0.86 0.79

4.An equity dividend of 4ngwee per share was paid on 30 May 2021 and, after the rights issue, a further dividend of 2 ngwee per share was paid on30^th November 2021.

5.The balance on current tax represent represents the under/over provision of the tax liability for the year ended 31^st March 2021. A provision of K28 million is required for current tax for the year ended 31^st March 2022 and at this date the deferred tax liability was assessed at K8.3 million.

Required

1.Prepare the statement of profit or loss for Lubuto for the year ended 31^st March 2022.

2.Prepare the statement of financial position for; Lubuto for the year ended 31 March 2022,