LON DORM FINANCIAL STATEMENTS FOR PUBLICATION ser COMPANIES TRADING IN GOODS Revenue cost of Sales Credit GH 50,000 crecht bal Grass prokt astr. cost Admin Expense QUESTION 1 The trial balance of CPI Limited us at 31 December, 2018 is as follows: Debit GH Sales and Purchases 20,000 Inventory 8,000 Marketing and Distribution costs 8,000 Administration expenses 15,550 Trade Receivables and Payables 12,400 20,000 Cash and bank 8.100 Ordinary shares (GHC0.50) 52,000 8,000 Revaluation reserve 10% Redeemable preference shares (GH) 9,000 10% Loan Notes 8.000 Property. Plant and Equipment 75,000 Investment Property 10,000 Rental income from investment property 1,000 Retained profits (1January, 2018) wirent liability 3,000 Loan note interest - 400 Preference dividend 409 Interim ordinary dividend 1.500 Corporate Tax 500 Suspense 8,000 159,500 159.500 tan Litterest Botstavcking on loan The following is to be taken into account: 1. The inventory at cost on 31" December, 2018 was GH 14,500and the net realizable value was GH12.00 use the lower vale 2. The Property, Plant and Equipment include a building whose net book value is currently GH45,000 is to be revalued to GH49.000. 3. The balance on the corporation tax account represents an overprovision of tax for the Rescuchar Surplus (48) Dr PPE previous year. Tax for the current year is estimated at GH3.000 treated as a hability 4. The directors have decided to make an allowance for doubtful debts of 2% of trade receivables. This amount should be charged to administrative expense. 5 5. Depreciation charges for the year ended 31 December 2018 amounted to GH4800 This figure should be included in the administrative expense. 6. The investment property was acquired in January, 2018. The rental income from the investment property GH1,000 relates to the two-year period ending 31" December, 2019, The company adopts fair value model in subsequent measurement of the investment property and fair value assessment at 31" December, 2018 puts the valuation at GH18,000, 7. The suspense account represents the corresponding credit for cash received for a fully subscribed issue of ordinary shares made on 30 December, 2018. The terms of the share issue was 4,000 new ordinary shares were issued at GHc2.00 each. Required: In compliance with the Companies' Code provisions and in conformity with relevant International Financial Reporting Standards, prepare for publication: (0) the statement of profit or loss and other comprehensive income for the year ended 31" December, 2018 (ii) the statement of changes in cquity for the year ended 31" December, 2018. (ii) the statement of financial position as at 31 December, 2018 ) Notes to the financial Statement QUESTION 2 The following is the trial balance of Kwei Limited, a dealer in Oracle Software, as at 31" December, 2018 GH. GH Purchases and Sales 243,750 490,500 Ordinary shares (GHCL00 per share) 221.500 Retained earnings 60,000 Revaluation Reserve 10,000 Trade Receivables and Payables 159,000 51,000 Inventory 99,000 Land and building (cost) 125.000 Delivery Vans: (cost) 105,500 Accumulated depreciation (31 December, 2015) 32.500 Plant and Equipment: (cost) 90.000 Accumulated depreciation (1" December 2015) 37,300 Administrative expenses 26,000 Selling and Distribution expenses 27,500 Investment property 100,000 Investment income Cash and cash equivalents 35,000 27,000 Dividend paid 1,750 Provision for doubtful debts 14,000 Bad debts 17,500 Suspense 70,000 1,022,000 1.022.000 Additional information available is given below: 1) The inventory at costa 31 December, 2018 was valued at GH137,500 and the net realizable value was the 129,500. 2) Allowance for doubtful debt is to be increased to GH19,080 as at 31" December 2018 3) An amount of GH6,000 in respect of rent and rates is included in administrative expenses. This amount relates to 2019 financial year. 4) Depreciation for the year ended 31 December 2018 is to be calculated using the following rates: Plant and equipment 10% on cost Administrative expense Delivery Vans 15% on cost Distribution cost 5) To reflect a marked increase in property prices, Kwei Limited accepted the report of an independent surveyor who valued the land and building up by GH15,000 on that on 31 December 2018 1) The audit fee of GH 1,000 is to be accrued. 2) The suspense account represents the corresponding credit for cash received for a fully subscribed issue of equity shares made on 30 December 2018. The terms of the share issue was 35,000 new ordinary shares were issued at GHe each 3) The directors have estimated the provision for income tax for the year ended 31 December 2018 at GH 15.000 Required: In compliance with the Companies' Code provisions and in conformity with relevant International Financial Reporting Standards, prepare for publication the statement of profit or loss and other comprehensive income for the year ended 31 December, 2018 the statement of changes in equity for the year ended 31 December, 2018