QUESTION $1$

$[30$ MARKS$]$

Kinta Baloyi Limited has an authorised share capital of $2500000$ ordinary shares of no$-$par value, of which $600000$ had arready been issued by the time the trial balance was prepared. The financial drector requests your accounting knowledge in preparing the financial statements for the year ended $31$ December $2021,$ and provides you with the following information: Trial balance at $31$ December $2021$

$\backslash$table$[[,\backslash$table$[[$Debit$],[$R$]],\backslash$table$[[$Credit$],[$R$]]],[$Property$,1300000,],[$Furniture and Equpment $($carrying value$),925000,],[$Investments$,150000,],[$Bank$,35000,],[$Trade receivables,$222000,],[$Inventory$,201000,],[$Ordinary share capital $(6000000$ shares$),,1200000],[$Retained earnings $(1$ January $2021),,210000],[$Revaluation surplus $(1$ January $2021),,225000],[14\%$ Loan from SABA Bank,,$100000],[$Trade payables,,$90000],[$Current tax payable,,$152000],[$Sales$,,4900000],[$Dividend income,,$55000],[$Interest income,,$15000],[$Profit on disposal of equipment,,$20000],[$Cost of sales,$3020000,],[$Distribution costs,$360000,],[$Operating costs,$72000,],[$Administrative costs,$330000,],[$Tax expense,$352000,],[6967000,6967000]]$

Additional information:

$1$ On $31$ December $2021$ it was estimated that the inventory has a net realisable value of R$180000.$ No entries have yet been made for this

$2.$ The loan from SABA Bank was acquired on $1$ January $2020$ and is repayable in full on $1$ January $2022.$ The Interest is payable annually in arrears on $1$ January. Provide for the interest outstanding on the loan for the current financial period.

On $31$ December $2021$ the property was re$-$valued upwards by R$300000$ using the replacement value method. This revaluation still has to be recorded.

On $1$ December $2021,$ Kinta Baloyi Ltd received cash for $125000$ shares issued at R$2$ each, and all the shares were allotted on this day. This issue has not yet been recorded

$,$ On $31$ December $2021$ the directors declared a dividend of $20$ cents per share on all the issued shares, including those issued on $1$ December $2021.$ No entries have yet been made for this.

In drafting the trial balance, all the expenses of Kinta Baloyi Limited had been allocated to the following four functions Cost of sales,

Distribution costs,

Operating costs, and

Administration costs

The above costs reflected on the trial balance include the following:

Depreciation on the sales department equipment, R$55000$

Depreciation on the office furniture and equipment, R$65000$

Salaries of the sales staff, R$220000$

Salaries of the office staff, R$200000$

REQUIRED:

a$).$ Prepare general journal entries on $31$ December $2021$ for additional information numbers $1,2,3,4$ and $5.$ You are not required to prepare the closing transfers for the write down of inventory and ordinary dividends accounts. $($Dates and narrations may be omitted.$)$

b$).$ Prepare the statement of comprehensive income of Kinta Baloyi Limited for the year ended $31$ December $2021$ in conformity with International Financial Reporting Standards. $($Show your calculations in brackets.$)$

c$.)$ Prepare the statement of changes in equity of Kinta Baloyi Limited for the year$-$ended $31$ December $2021$ in conformity with International Financial Reporting Standards.

d$).$ Prepare the statement of financial position of Kinta Baloyi Limited at $31$ December $2021$ in conformity with International Financial Reporting Standards. $($Show your calculations in brackets.$)$

END OF PAPER