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Please help ABC Limited was incorporated in 2010 with an authorized capital consisting of 40000000 ordinary shares. You have been asked to help prepare the
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ABC Limited was incorporated in 2010 with an authorized capital consisting of 40000000 ordinary shares. You have been asked to help prepare the financial statements of ABC Ltd for the year 31 December 2020. The company's trial balance as at 31 December 2020 is shown below: Additional information: 1. The share capital of the company consists of ordinary shares with a nominal value of N$1 each. 2. The inventories at the close of business on 31 December 2022 were valued at N\$9 974000 , this consists of: 3. The company paid N$1440000 for one year's insurance on 1 February 2020 , this is due to expire on 31 January 2021 . This should be allocated to administration. 4. The company hired vehicles to distribute finished goods locally. It was able to negotiate a deal with a local company for the period 1 September to 30 November 2020 at a cost of N\$198 000. This was invoiced on 6 December 2020 and paid in full on 1 March 2021 . No entry has been made in the accounts. 5. Interest on the bank loan for the last six months of the year has not been included in the accounts in the trial balance. 6. Depreciation for the year amounts to N$300000, a half of this amount is to be apportioned to cost of sales and the remaining balance equally between distribution costs and administrative expenses. 7. The company made a bonus issue of 2500000 ordinary shares out of retained earnings but has not made any accounting entries for this. 8. The tax charge for the year has been calculated as N$1960000Step by Step Solution
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