Question 2.

As a check, you will now have to calculate the increase in equity based on the difference in equity between the opening balance sheet and the expected closing balance sheet.

Construct the balance sheets according to those that appear in the power point slide.

First, construct a balance sheet for the start of the years production.

Assets include a land value of K 9,500,000.

Depreciable assets have a value of K 1,440,000.

Cash on hand is K1,000,000.

The only liability is a bank loan of K 2,000,000.

(5 Marks).