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QUESTION 2 The following is the trial balance of Akwaaba Limited, a trading company, as at 31 December, 2016: Debit GH'000 Credit GH&'000 14,500 2,500
QUESTION 2 The following is the trial balance of Akwaaba Limited, a trading company, as at 31 December, 2016: Debit GH'000 Credit GH&'000 14,500 2,500 3,000 800 1,500 3,600 8,540 5,600 68,865 500,000 Ordinary shares 8% Loan notes (2012 - 2017) 10% Preference shares (redeemable) Revaluation surplus General reserve Retained earnings - 1/1/2016 Administration expenses Selling & distribution expenses Sales Inventory - 31/12/2016 Cost of sales Loan Note interest paid Investment income Leasehold building at valuation-1/1/2016 Plant and equipment-cost/depreciation Computer equipment-cost/depreciation Motor vehicles - cost/depreciation Investment property Trade receivables Bank Trade payables Deferred tax - 1/1/2016 3,150 35,500 195 360 14,000 13,750 7,200 1,500 8,700 9,200 3,200 2,000 400 910 3,400 2,300 107,335 107,335 Additional information: i) Non-current assets: Depreciation of Property, plant and equipment is to be provided on the following bases: Plant and equipment 10%on cost Computer equipment 25%on cost Motor vehicles 20%on reducing balance Nodepreciation hasyetbeenchargedonanynon-currentassetfortheyearended31s December, 2016. . Akwaaba revalue its buildings at the end of each accounting year. At 31" December, 2016 the relevant value to be incorporated into the financial statements is GH 28,200,000 The building's remaining life at the beginning of the current year (1''January 2016) was 25 years. Akwaaba does not make an annual transfer from the revaluation reserve to retained earnings in respect of the realisation of the revaluation surplus. Ignore deferred tax on the revaluation surplus. The company paid ordinary dividends of GH4.8 per share 30 October, 2016. The dividend payments are included in administrative expenses in the trial balance. On 4th November, 2016 the company made a bonus issue from retained earnings of one new share for every four shares in issue at GH10.00 each. This transaction is yet to be recorded in the books. Provision is to be made for a full year's interest on the Loan notes, 111) iv) vi) The investment property held at 31 December, 2016 had a fair value of GH9,700,000. There were no acquisitions or disposals of these investments during the year. In June, 2016, Akwaaba's internal audit unit discovered a fraud committed by the company's credit manager who did not return from a foreign business trip. The outcome of the fraud is that GH1,000,000 of the company's trade receivables have been stolen by the credit manager and are not recoverable. Of this amount, GH400,000 relates to the year ended 31 December, 2015 and the remainder to the current year. Akwaaba is not insured against this fraud. CorporateincometaxpayableestimatedontheprofitfortheyearisGH7,000,000. vii) Required: Prepare the following financial statements of Akwaaba Limited for publication in accordance with International Financial Reporting Standards (IFRS): a) Statement of comprehensive income for the year ended 31" December, 2016; b) Statement of changes in equity for the year ended 31st December, 2016; and c) Statement of financial position as at 31" December, 2016 (Note: Accounting policy notes are not required)
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