Question $1(60$ marks$)$

Caribbean Limited Trial Balance December $31,2022$

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Section A Answer question one

Question $1(60$ marks$)$

The $2022$ financial statements were approved by the board of directors on March $31,2023.$

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Question $1$ continued

Additional information:

Net dividend income of $$180,000$ and interest income of $$270,000$ are included in other operating income. The dividend income and the interest income were received net of income tax. The income tax rate is $10\%.$

Corporation tax for the year to December $31,2022,$ is estimated to be $$21,600,000.$ The corporation tax is not yet reflected in the accounts. Corporation tax is charged at a rate of $20\%.$

Deferred taxation should be decreased by $$50,000.$

The audit fees for the financial year ended December $31,2022,$ amounted to $$2,200,000.$ The audit fees should be reflected under administrative expenses. The amount for audit fees for $2022$ is not yet reflected in the accounts.

The weighted average number of ordinary shares issued during $2022$ amounted to $240,000,000.$

Transfer $$15,000,000$ to general reserves.

In January $2022$ the company made a $5$ to $1$ bonus issue of ordinary shares out of General Reserves. $200,000,000$ ordinary shares were in issue when the bonus dividend was declared. The stated value for each share is $$1.$ The bonus issue is not yet reflected in the accounts.

The long term loan is being repaid in equal instalments of $$5,000,000$ each year on December $31.$ All principal loan payments were made on time. No interest was outstanding at the beginning of the year.

The current portion of long term receivables is $$200,000.$

The fair value of the investment property on December $31,2022,$ was $$32,000,000.$ The cost method is used for investment property.

A further dividend in respect of the financial year $2022$ was declared by the board of directors on February $24,2023,$ amounting to $$20,000.$

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