QUESTION 1

The following records relate to Pleasant Place Limited for the 2020 financial year.

	Debit	Credit
	GHS'000	GHS'000
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.

1. 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.
2. 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
3. No final dividend is being proposed
4. 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.
5. 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;

1. Statement of comprehensive income for the year ended 31 December 2020
2. Statement of changes in equity for the year ended 31 December 2020
3. 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.