QUESTION $1$

Kinta Baloyi Limited has an authorised share capital of $2500000$ ordinary shares of no$-$par value, of which $600000$ had already been issued by the time the trial balance was prepared. The financial director 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 $2021$

Debit R Credit R

Property $1300000$

Furniture and Equipment $($carrying value$)925000$

Investments $150000$

Bank $35000$

Trade receivables $222000$

Inventory $201000$

Ordinary share capital $(600000$ 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 $352000$

$69670006967000$

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.

$3.$ 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.

$4.$ 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.

$5.$ 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.

$6.$ 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

$7.$ 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.$)$