QUESTION 1 The Prestige Bank Limited has presented the following trial balance for the 2019 financial year: Debit Credit GHS000 GHS000 Interest income 23,259 Interest on customers deposits 10,545 Commission and fee income 4,164 Dividends from investments 165 Profit on foreign exchange transaction 423 Operating expenses 3,033 Staff costs 6,639 Directors Remuneration 117 Rental income from investment property 300 Motor vehicles/Accumulated depreciation 981 546 Equipment & Furniture/accumulated depreciation 1,764 489 Computers/Accumulate depreciation 1,170 399 Land and buildings/Accumulated depreciation 2,328 249 Corporate tax 540 Investment property 2,940 Sundry payables 1,785 Amounts due to other banks 11,613 Customers Current accounts 67,905 Customers Savings accounts 23,457 Fixed/time deposits of customers 10,746 Interim dividend paid 413 Loan, advances and overdraft granted 28,000 Loan impairment provision 01/01/2019 1,842 Stated Capital 14,469 Retained profit, 01/01/2019 3,438 Statutory reserves, 01/01/2019 11,964 Revaluation surplus 1,332 Trade investments 4,029 Government Treasury bills 58,779 Deposits with other banks 38,382 Cash in hand 4,887 Balance with Bank of Ghana 13,998 _____ 178,545 178,545 Additional information: i) Prestige Limited has been sued for the following two alleged infringements of law: (1) Unauthorized use of a brand; the claim is for GHS 50,000 (2) Non-payment of end-of-service severance pay and gratuity to 7 employees whose appointments were terminated without Prestige giving any reason; the class action lawsuit is claiming GHS150,000.

Legal counsel of the bank is of the opinion that not all the legal cases are tenable in law and has communicated to Prestige. This assessment of the two lawsuits are: Lawsuit 1: The chances of this lawsuit are remote. Lawsuit 2: It is probable that Prestige would have to pay the displaced employees, but the best estimate of the amount that would be payable if the plaintiff succeeds against the entity is GHS 100,000. ii) Provide for depreciation at the following rates: Land and buildings 5% on cost. Equipment and furniture 20% on cost. Computers 20% on cost. Motor vehicles 20% on cost. iii) Provide for Audit fees of GHS180,000. iv) The bank has advanced GHS2,553,000 loan to a customer. The customer is currently suffering from Corona virus and it has been established by the doctors that it is virtually certain the customer will die. v) In compliance with the Banking Act 12.5% of profit after tax is to be transferred to statutory reserve. vi) Interim tax for 2019 based on self-assessment was settled at GHS540,000. Corporate tax applicable to the bank is 25%. vii) The investment property was acquired in February, 2019. The directors have adopted fair valuation model of accounting for investment properties in line with IAS 40. At 31st December, 2019, it was fair valued at GHS4,000,000. viii) On 31st December, the Directors of the bank further declared dividend of GHS2 per share. On that same date, the directors agreed to pay end-of-year bonus to staff estimated at GHS216,000. This is yet to be paid. This should be accounted for as an operating expense. Required: Prepare the following financial statements of Prestige Bank Limited for publication in accordance with relevant legislations and International Financial Reporting Standards (IFRS): a) The statement of profit or loss and other comprehensive income for the year ended 31st December, 2019. (8 marks) b) The statement of changes in equity for the year ended 31st December, 2019. (4 marks) c) The statement of financial position as at 31st December, 2019. (8 marks) d) Show clearly all relevant workings.

249 540 Q This is how the figures are arranged GHSC Interest 23,259 Interest on chers' deposit 10,545 Commission md Tee income 4,164 Dividend Fium nesments Pront on foreign exchange from 1493 Operating expenses 3,033 stays costs 6639 Director, Renntradim 113 Rented income from 300 Motor Vehicular depreciation 981 SY Equipment furniture Inde tepreciation 1764 computers / Arc depreciation 1190 399 Landbouding ke depreciation 5.398 Corporate take investment property 2,940 sundry payables Amount! dire to other branks Custom Current account 64,905 Customers' Swing accounts 23,457 fixel/time depend of cutomers 10,746 Intain dividend paid 413 Loan, adance and wedeat ganded 58.000 Lean impairment provision 1/2019 State capital Peained plotit Ollot 1019 Statutory reserves, ollot/2019 11,964 Revaluation surplus 1332 Trade investochts 4,029 Goveromed Treuiry bills 58, 779 Deposits with other banks 38.382 cath in hand 4,887 Balance with Bank q Thana 13,998 178,545 1,785 11,613 1,842 14,459 3,438 178,545 249 540 Q This is how the figures are arranged GHSC Interest 23,259 Interest on chers' deposit 10,545 Commission md Tee income 4,164 Dividend Fium nesments Pront on foreign exchange from 1493 Operating expenses 3,033 stays costs 6639 Director, Renntradim 113 Rented income from 300 Motor Vehicular depreciation 981 SY Equipment furniture Inde tepreciation 1764 computers / Arc depreciation 1190 399 Landbouding ke depreciation 5.398 Corporate take investment property 2,940 sundry payables Amount! dire to other branks Custom Current account 64,905 Customers' Swing accounts 23,457 fixel/time depend of cutomers 10,746 Intain dividend paid 413 Loan, adance and wedeat ganded 58.000 Lean impairment provision 1/2019 State capital Peained plotit Ollot 1019 Statutory reserves, ollot/2019 11,964 Revaluation surplus 1332 Trade investochts 4,029 Goveromed Treuiry bills 58, 779 Deposits with other banks 38.382 cath in hand 4,887 Balance with Bank q Thana 13,998 178,545 1,785 11,613 1,842 14,459 3,438 178,545