Question
QUESTION 1 The following records relate to Pleasant Place Limited for the 2020 financial year. Debit Credit GHS000 GHS000 Cash at bank 100 Inventory 2,400
QUESTION 1
The following records relate to Pleasant Place Limited for the 2020 financial year.
| Debit | Credit |
GHS000 | GHS000 | |
Cash at bank | 100 |
|
Inventory | 2,400 |
|
Administrative expenses | 2,206 |
|
Distribution expenses | 650 |
|
Non-current assets at cost: |
|
|
Building | 10,000 |
|
Plant and equipment | 1,400 |
|
Motor vehicle | 320 |
|
Suspense | 1,500 |
|
Accumulated Depreciation: |
|
|
Buildings |
| 4,000 |
Plant and equipment |
| 480 |
Motor vehicles |
| 120 |
Income surplus |
| 876 |
Trade receivables | 4,200 |
|
Purchases |
| 200 |
Dividend | 11,752 |
|
Sales revenue |
| 1,390 |
Sales tax payables |
| 1,050 |
Ordinary share |
| 1,500 |
| 22,352 | 22,352 |
The following additional information is relevant.
- Inventory at 31 December 2020 was valued at GHS1,600,000. While doing the inventory count, errors in the previous years inventory count were discovered. The inventory brought forward at the beginning of the year should have been GHS2.2m, not GHS 2.4 m as above.
- Depreciation is to be charged as follows:
- Buildings at 5% straight line, charged to administrative expenses
- Plant and equipment at 20% on the reducing balance basis, charged to cost of sales
- Motor vehicles at 25% on the reducing balance basis, charged to distribution
- No final dividend is being proposed
- A customer has gone bankrupt owing GHS76,000. This debt is not expected to be recovered and an adjustment should be made. An allowance for receivables of 5% is to be set up.
- 1 million new ordinary shares were issued worth GHS1.50 on 1 December 20x9. The proceeds have been left in a suspense account.
Required
Prepare the following;
- Statement of comprehensive income for the year ended 31 December 2020
- Statement of changes in equity for the year ended 31 December 2020
- Statement of financial position as at 31 December 2020
All statements are to be prepared in accordance with the requirements of international Financial Reporting Standards. Ignore taxation.
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