: Prepare the following for Prisca Ltd in accordance with the minimum requirements of the New Zealand equivalents to International Financial Reporting Standards and the Companies Act 1993:

1 Statement of Profit and loss and Comprehensive Income for the year ended 31st March 2021 12 marks

2 Statement of Changes in Equity for the year ended 31st March 2021 12 marks

3 Statement of Financial Position as at 31st March 2021 (Comparative figures are required) 21 marks

4 Notes to the above financial statements 45 marks

5 Show workings for Adjustments for Expenses 7 marks

6 Marks are awarded for presentation 3 Marks

Total 100 marks Information:

Prisca Ltd Prisca Ltd is a New Zealand owned company reporting under full IFRS. The company manufactures and supplies high-quality Garden tools and gardening equipment. It sells its own products and also sells on commission for other companies. You are presented with the trial balance for Prisca Ltd as at 31st March 2021, together with opening balances at 1st April 2020.

Trial Balance as at 31st March 2021 Trial Balance as at 1st April 2020 DEBIT CREDIT DEBIT CREDIT $000s $000s $000s $000s Accounts Payable 594cr 1,78cr Accounts Receivable 2,592 1,856 Accumulated Depreciation Buildings 592 592 Accumulated Depreciation Fixtures & Equipment 185 185 Accumulated Depreciation Machinery 686 686 Accumulated Depreciation Motor Vehicles 158 158 Allowance for Doubtful Debts 130 130 Asset Revaluation Reserve 1,373 1,373 3 Page 3 Bank 924 120 Buildings (At Cost) 2,772 2,772 Cost of Sales 18,110 Commission Income 308 Directors Fees 158 Expenses Distribution 587 Expenses Administration 2,880 Expenses Financial 130 Fixtures and Equipment (At Cost) 436 436 GST Payable 212 359 Income Tax Expense 1322 Income Tax Payable 352 342 Intangible Assets 726 780 Interim Dividend (Paid on 15th March 2021) 528 Inventory 5,562 3,467 Investments 933 933 Investment Income 79 Land (at Valuation) 3,960 3,960 Lease Expenses 119 Loan 554 554 Machinery (at Cost) 1,870 1,500 Mortgage 634 660 Motor Vehicles (at Cost) 383 383 Other Income 497 Other Reserve - Revaluation of Investments 119 119 Prepayments 176 Provisional Tax Paid 231 Retained Earnings 3,982 3,982 Sales 30,534 Share Capital 5,280 5,280 Wages and Salaries 1,870 Total 46,269 46,269 16,207 16,207 4 Page 4 Additional Information: Ignore GST applications in relation to this additional information. Prisca Ltd recorded amounts are rounded to the nearest dollar.

1. Depreciation has not been accounted for. Depreciation rates are: a. Buildings 2% p.a. (straight line) on cost or valuation b. Fixture and equipment - 20% p.a. (straight line) on cost c. Machinery - 30% diminishing value d. Motor vehicles 30% diminishing value

2. On 1st April 2020 Prisca Ltd commenced the construction a warehouse building for the company. The warehouse was completed and ready for occupation on 31st March 2021. Prisca Ltd did not need to borrow funds directly for the construction of the factory because it had existing long-term financing available of $400,000 at 8% per annum and $154,000 at 10% per annum which were used for the construction project. Payments for the materials, labour, and services relating to the construction of the factory were as follows:

1 April 2020 60,000

30 June 2020 60,000

31 December 2020 60,000

1 March 2021 190,000

Above amounts spent during the period was charged to administrative expense. The capitalized cost of the construction for the year ended 31st March 2021 has not been accounted for.

3. An invoice for some repair work done on the machinery prior to the year-end has been received but not processed. The invoice total was $5,000.

4. Expenses Administration, include: Audit fees paid to ABC Associate $42,000 Accounting fees paid to AACT & Co $51,000 Donations to approved charities $21,000

5. Expenses Financial, include: Interest paid mortgage $50,000 Interest paid loans $47,400 $ 1 April 2020 60,000 30 June 2020 60,000 31 December 2020 60,000 1 March 2021 190,000 370,000

6. Wages and Salaries include $200,000 related to sales staff and $300,000 for the directors remuneration.

7. Lease expenses are for computers and motor vehicles. $30,000 of the computer lease expenses related to computers for the sales staff.

8. Depreciation expense for Fixtures and Equipment in the year ended 31st March 2020, is overstated by $50,000.

9. The buildings comprise a production area, an office space, and a separate packaging area. There is also a small shop next to the office for direct sales and customer pickups. Traditionally the company charges 10% of both its building and fixtures and equipment depreciation to distribution expenses.

10. One of the motor vehicles is a delivery truck which is recorded at the cost of $50,000 with accumulated depreciation to the beginning of the current year of $10,000.

11. There were no disposals or additions of fixtures and equipment during the year.

12. New machinery was purchased on 1st January 2021.

13. A machine was sold for $200,000 cash on 31st March 2021. The machine had an original cost of $400,000 and a carrying amount of $150,000. No record has been made of the sale.

14. On 31st March 2021, the land was revalued by New Lynn Registered Valuers, a firm of independent registered valuers who considered the land to have increased in value to $4,250,000. This revaluation has yet to be recorded.

15. On 31st March 2021, Prisca Ltd adopted the revaluation model to account for the class of Buildings. The fair value of Buildings was determined to be $3,320,000 by New Lynn Registered Valuers. This has not been recorded.

16. Intangible assets are brand names and trademarks. Intangible assets originally cost $960,000. Impairment testing of the intangible assets indicates $30,000 impairment for the current year which has not been included in expenses.

17. Other income includes interest income of $25,000

18. As at 1st April 2020 there were 5,280,000 shares on issue at $1 each. On 10th March 2021, another 600,000 shares were issued at $1.50 each. The money has been received from the trust company handling the share issue on 31st March 2021. This issue and the proceeds from the issue has not been recorded in the information supplied.

19. The mortgage is secured over land and buildings and carries a flat interest rate of 10% per annum. A lump sum capital repayment was made on 31st March and has been recorded. This amount is the annual repayment required under the mortgage agreement.

20. On 31st March 2021, it is estimated that the position of allowance for doubtful debts was $135,000 based on analysis of previous debt collection history. Prisca Ltd uses the Allowance method to account for doubtful debts.

21. Inventory is carried at the lower of cost (Weighted Average Cost) and net realizable value. 25% of inventories are raw materials, 20% are work in progress, and the balance comprises finished goods held for sale. The net realizable value of inventory was $5,500,000.

22. Outstanding directors fees for the March 2021 meeting of $20,000 have not been recorded.

23. Included in the prepayments, there is a property insurance bill of $120,000 paid on 1st January 2021 and covering the period from 1st January 2021 to 31st December 2021. This has not been adjusted on the Balance Date.

24. Investments are shares of Tauranga Ltd purchased in February 2020. The fair value was $938,000 at the year-end. This revaluation has not been accounted for. Investments are classified as available-for-sale financial assets by the company.

25. A contract has been entered into to extend the building. This work will be carried out during the next financial year and will cost $1,700,000.

26. Commission Income, earned but not yet recognized, was $150,000 for this year.

27. Apart from the change in the measurement of buildings, there are no changes in the accounting policies from those applied last year.

28. On 10th April 2021, the directors have authorized a final dividend of 20 cents per share.

29. On 23rd May 2021, a production plant was destroyed by a fire resulting in damages of $800,000. Insurance will cover $600,000 of the damages, but payment of the insurance claim has been delayed by a police investigation. (Assume the date when financial statements are authorized for the issue is 31st May 2021)

30. A major debtor Northwing Ltd owing $150,000 to Prisca Ltd went into liquidation. This information became available to Prisca Ltd on 7th May 2021. No adjustment to the allowance for doubtful debts has been made to reflect this fact. Correspondence has been received from the liquidator indicating that Prisca Ltd cannot collect anything from the liquidation.

31. Prisca Ltd has been involved in a dispute with a government environment agency relating to the release of noxious wastewater from its manufacturing plant in early February 2021. An expert investigation was conducted to determine if the company was at fault. The draft financial report already discloses contingent liability in the notes detailing the investigation and estimating the potential damages at $800,000. The investigators report, released on 1st April 2021, found Prisca Ltd to be responsible for the release and damages amounting to $650,000 were payable by the company.

32. A purchase invoice amounted to $3,000 dated on 28th March 2021 was omitted from the books of accounts. The customer has delivered goods to the company on the same date.