QUESTION 2 (20 MARKS) The trial balance for Delix Company Ltd as at 30 June 2021 is as follows: N$'000 N$'000 Ordinary share capital: 50c shares 65,000 Share premium 24,000 Revenue 174,234 Purchases 110,630 Inventory 30 June 2020 5,130 Returns outwards 3,120 Returns inwards 2,690 Carriage outwards 580 Carriage inwards 1,160 Salaries and wages (40% Distribution, Admin 60%) 22,410 General expenses 21,955 Directors' remuneration 4,500 Audit fee 500 Land at valuation 52,370 Property at valuation 76,200 Property accumulated depreciation as at 30 June 22.670 3 2020 Plant and equipment at cost 2,380 990 Plant and equipment accumulated depreciation as at 30 June 2020 Furniture and fittings at cost 1,740 Furniture and fittings accumulated depreciation as at 670 30 June 2020 Trade receivables 1,980 Trade payables 2,180 Bank 279 Dividends paid 2,500 Revaluation reserve as at 30 June 2020 2,500 Retained earnings as at 30 June 2020 7,640 6% loan redeemable 2030 4,000 307,004 307,004 The following information needs consideration and are applicable: i. Inventory as at 30 June 2021 was valued at N$5,610,000. ii. The interest on the loan has not been paid for the year ended 30 June 2021 and must be accrued. iii. Tax charge for the year ended 30 June 2021 is estimated at N$ 3,110,000. iv. A further amount for audit fees of N$250,000 needs to be accrued for the year ended 30 June 2021. V. During the year an item of plant costing N$350,000 and with accumulated depreciation of N$110,000 was sold for N$ 190,000. The sale proceeds have not yet been received and no adjustments have been made to the accounts in respect of the sale of the plant. 4 vi. vii. viii. Adjustments for accruals and prepayments of expenses are required for the year ended 30 June 2021 in respect of general expenses as follows: Accruals. Prepayments Expenses N$ 130,000 N$23,000 No further revaluations have been carried out during the year ended 30 June 2021. You may ignore VAT. Depreciation, charged for a full year in the year of purchase but none in the year of sale, is to be calculated for the year ended 30 June 2021 as follows: Property - 2% per annum straight line on valuation; Plant and equipment -10% per annum straight line on cost; Furniture and fittings - 10% per annum reducing balance. Despatch department is allocated 20% of depreciation and 80% for administration ix . . . . REQUIRED: a) Prepare the statement of profit or loss and other comprehensive income of Delix Company Ltd for the year ended 30 June 2021 in conformity with the International Financial Reporting Standards and using the function method. (20) END OF TEST PAPER QUESTION 2 (20 MARKS) The trial balance for Delix Company Ltd as at 30 June 2021 is as follows: N$'000 N$'000 Ordinary share capital: 50c shares 65,000 Share premium 24,000 Revenue 174,234 Purchases 110,630 Inventory 30 June 2020 5,130 Returns outwards 3,120 Returns inwards 2,690 Carriage outwards 580 Carriage inwards 1,160 Salaries and wages (40% Distribution, Admin 60%) 22,410 General expenses 21,955 Directors' remuneration 4,500 Audit fee 500 Land at valuation 52,370 Property at valuation 76,200 Property accumulated depreciation as at 30 June 22.670 3 2020 Plant and equipment at cost 2,380 990 Plant and equipment accumulated depreciation as at 30 June 2020 Furniture and fittings at cost 1,740 Furniture and fittings accumulated depreciation as at 670 30 June 2020 Trade receivables 1,980 Trade payables 2,180 Bank 279 Dividends paid 2,500 Revaluation reserve as at 30 June 2020 2,500 Retained earnings as at 30 June 2020 7,640 6% loan redeemable 2030 4,000 307,004 307,004 The following information needs consideration and are applicable: i. Inventory as at 30 June 2021 was valued at N$5,610,000. ii. The interest on the loan has not been paid for the year ended 30 June 2021 and must be accrued. iii. Tax charge for the year ended 30 June 2021 is estimated at N$ 3,110,000. iv. A further amount for audit fees of N$250,000 needs to be accrued for the year ended 30 June 2021. V. During the year an item of plant costing N$350,000 and with accumulated depreciation of N$110,000 was sold for N$ 190,000. The sale proceeds have not yet been received and no adjustments have been made to the accounts in respect of the sale of the plant. 4 vi. vii. viii. Adjustments for accruals and prepayments of expenses are required for the year ended 30 June 2021 in respect of general expenses as follows: Accruals. Prepayments Expenses N$ 130,000 N$23,000 No further revaluations have been carried out during the year ended 30 June 2021. You may ignore VAT. Depreciation, charged for a full year in the year of purchase but none in the year of sale, is to be calculated for the year ended 30 June 2021 as follows: Property - 2% per annum straight line on valuation; Plant and equipment -10% per annum straight line on cost; Furniture and fittings - 10% per annum reducing balance. Despatch department is allocated 20% of depreciation and 80% for administration ix . . . . REQUIRED: a) Prepare the statement of profit or loss and other comprehensive income of Delix Company Ltd for the year ended 30 June 2021 in conformity with the International Financial Reporting Standards and using the function method. (20) END OF TEST PAPER