Question 2

You are the accountant of Today Ltd, a business that buys and sells equipment. The trial balance at 31 December 2019 was as follows: K K Equity share capital (K1) 5,000 Retained earnings at 1 January 2019 5,835 Revenue 66,980 Staff costs 5,400 Inventory at 1 January 2019 3,930 Purchases 38,760 Distribution costs 3,130 Administrative expenses 3,790 Loan interest 200 Investment income 250 Tax 200 Receivables and payables 9,290 2,360 Bank 3,125 Motor vehicles cost 5,000 Buildings cost 12,000 Motor vehicles accumulated depreciation 1 January 2019 1,000 Buildings - accumulated depreciation 1 January 2019 2,400 Debentures (2022) 1,000 84,825 84,825 Additional information: 1. Today Ltd has not made any additions or disposals of tangible non-current assets in the year. Its depreciation policy is as follows: Motor vehicles 20% reducing balance Buildings 25 years straight line The depreciation expense for the year is charged to cost of sales. 2. Inventory at the end of the year was valued as follows: Cost (K) NRV (K) Bats 2,500 4,000 Gloves 650 500 Pads 1,000 2,000 Total 4,150 6,500 3. Staff costs are to be apportioned equally across cost of sales, distribution costs and administrative expense. 4. The balance of tax on the tax account represents the over/under provision for the prior year. An estimate of K1,500 has been made for the tax payable at the year-end.

Required:

Prepare a statement of profit or loss and other comprehensive income, statement of changes in equity and a statement of financial position for the year ended 31 December 2019.

66.7% Question 2 You are the accountant of Today Lid, a business that buys and sells equipment. The trial balance at 31 December 2019 was as follows K K 5.000 5,835 66,980 5.400 3,930 38,760 3,130 3,790 200 Equity share capital (1) Retained earings at 1 January 2019 Revenue Stall costs Inventory at 1 January 2019 Purchases Distribution costs Administrative expenses Loan interest Investment income Tax Receivables and payables Bank Motor vehicles - cost Buildings - cost Motor vehicles - accumulated depreciation 1 January 2019 Buildings - accumulated depreciation 1 January 2019 Debentures (2022) 250 2,360 200 9,290 3,125 5,000 12,000 1,000 2,400 1,000 84,825 84,825 Additional information: 1. Today Ltd has not made any additions or disposals of tangible non-current assets in the year. Its depreciation policy is as follows Motor vehicles - 20% reducing balance Buildings - 25 years straight line The depreciation expense for the year is charged to cost of sales 2. Inventory at the end of the year was valued as follows: Cost (K) NRVIK Bats 2,500 4,000 Gloves 650 500 Pads 1,000 2,000 Total 4.150 6.500 3. Staff costs are to be apportioned equally across cost of sales, distribution costs and administrative expense 4. The balance of tax on the tax account represents the overlunder provision for the prior year An estimate of K1,500 has been made for the tax payable at the year-end Required: I Prepare a statement of profit or loss and other comprehensive income statement of changes in equity and a statement of financial position for the year ended 31 December 2019