Question 1

The following Trial Balance is extracted from the books of Makororo Pichery LTD as at 31 December 2021

	Debit	Credit
	N$	N$
Inventory at 1 January 2021	124 000
Administrative expenses	245 800
Building at cost at 1 January 2021	1 200 000
Issued Share Capital		200 000
Accumulated depreciation Trucks 1January 2021		126 000
Purchases	1 248 600
Revenue		2 146 300
Accumulated depreciation Fixtures & fitting 1 January 2021		214 600
Long term loan		350 000
Income tax	23 000
Trade receivables	362 000
Trade payables		145 200
Accumulated depreciation building 1 January 2021		320 000
Trucks at Cost at 1 January 2021	246 000
Allowance for doubtful debts		11 400
Revaluation surplus		42 000
Current tax payable		23 000
Returns		6 000
Bank	10 000
Fixtures & fittings at Cost at 1 January 2021	86 400
Distribution cost	242 000
Retained earnings at 1 January 2021		589 300
	4 173 800	4 173 800

The following information, based on your investigations, has also come to your attention:

1. Inventory at 31 December 2021 is N$146,000. This includes obsolete inventory costing N$ 4,240 which will be given away free to a local childrens charity.

2. Depreciation is to be charged as follows: Buildings 2% straight line on Cost

Fixtures & fittings 15% straight line on Cost

Trucks 25% reducing balance

Depreciation for the year is charged in full in the year of purchase and none in the year of sale

3. The building was revalued to N$ 900,000 on 31 December 2021

4. The current tax payable amount outstanding from 2020 was paid in full in July

2021. While the transaction was correctly recorded in the firms bank account, the Income Tax account was debited by mistake. The income tax amount for 2021 is estimated at N$ 28,000.

5. The interest of 4% on the loan needs to be provided for.

6. Makororo Pichery LTD wrote off additional bad debts of N$ 5,000. The Allowance for doubtful debts should be set at 5%.

7. Makororo Pichery LTD limited rented and paid for a storage warehouse for a year with the rental period commencing on 1 march 2021. The amount paid was N$ 24,000.

8. Expenses are to be allocated evenly between distribution Costs and Administrative expense

Required:

1. Prepare an Comprehensive income statement for the year ended 31 December

2019?

2. Prepare a statement of Change in Equity as at 31 December 2019 ?
3. Prepare a Balance Sheet as at 31 December 2019 ?