Question 3 (55 Marks) WILLIAMS LIMITED TRIAL BALANCE ON 31 DECEMBER 2021 Additional information and adjustments: Idditional information and adjustments: 1. The company's authorised share capital consists of: - 3000000 ordinary shares with no par value - 200000012% preference shares at N\$ 1 par value. 2. On 1 December 2021, the directors of the company decided and resolved to use their general authorisation to affect the following: To issue 30000012% preference shares to the public 30000012% preference shares at par value. To issue 500000 no par ordinary shares of N$3.10 each. These transactions have not yet being recorded. 3. Annual depreciation has not yet been provided for. The company's accounting policy states that depreciation is written off as follows: - Office equipment 20% diminishing balance method - Delivery vehicles 25% straight-line method The company does not provide for depreciation on land and buildings. Office equipment exclusively used for administrative purposes and delivery vehicles used in the distribution of vehicle parts. The company did not purchase or dispose of any office or delivery vehicles during the year. 4. The company purchased land and buildings (Erf 34, Windhoek) in 2019 for N$2800000 by taking out a mortgage loan from Standard Bank. The company's accounting policy states that land and buildings should be revalued. Mr Damon Hill, a sworn appraiser, revalued the land and buildings for the first time on 31 December 2021 at a fair value of N$3500000. No entries pertaining to the revaluation have been recorded. 5. Interest on the mortgage loan of N$120000 was calculated correctly and has already been paid. 6. The company's credit controller, Mr Juan Montoya, performed an analysis of the company's debtors on 31 December 2021 . The analysis indicated that N$102000 of the outstanding debtors are expected not to be recoverable. The allowance for credit losses should be adjusted accordingly. Credit losses are considered part of the operating expenses. 7. The shareholders approved a final ordinary dividend of 50c per share 0n 31 December 2021. 8. It was decided on 31 December 2021 to transfer a further N$11300 to the general reserve. This transaction has not yet been recorded. 9. Assume a normal income tax rate of 28% Required: (comparative amounts are required where adequate information is available) (a) Prepare the following in accordance with the requirements of International Financial Reporting Standards (IFRS) and the Companies Act 28 of 2004: 1. Statement of Profit or loss and other comprehensive income for the year ended 31 December 2021 according to function of expenses. (15 Marks) 2. Statement of Financial position as at 31 December 2021. (15 Marks) 3. Statement of changes in equity for the year ended 31 December 2021. (15 Marks) 4. Notes to the financial statements as follows: (10 Marks) 4.1 Basis of presentation 4.2 Summary of significant accounting policies 4.3 Inventories 4.4 Trade and Other receivables 4.5 Property, Plant and Equipment Question 3 (55 Marks) WILLIAMS LIMITED TRIAL BALANCE ON 31 DECEMBER 2021 Additional information and adjustments: Idditional information and adjustments: 1. The company's authorised share capital consists of: - 3000000 ordinary shares with no par value - 200000012% preference shares at N\$ 1 par value. 2. On 1 December 2021, the directors of the company decided and resolved to use their general authorisation to affect the following: To issue 30000012% preference shares to the public 30000012% preference shares at par value. To issue 500000 no par ordinary shares of N$3.10 each. These transactions have not yet being recorded. 3. Annual depreciation has not yet been provided for. The company's accounting policy states that depreciation is written off as follows: - Office equipment 20% diminishing balance method - Delivery vehicles 25% straight-line method The company does not provide for depreciation on land and buildings. Office equipment exclusively used for administrative purposes and delivery vehicles used in the distribution of vehicle parts. The company did not purchase or dispose of any office or delivery vehicles during the year. 4. The company purchased land and buildings (Erf 34, Windhoek) in 2019 for N$2800000 by taking out a mortgage loan from Standard Bank. The company's accounting policy states that land and buildings should be revalued. Mr Damon Hill, a sworn appraiser, revalued the land and buildings for the first time on 31 December 2021 at a fair value of N$3500000. No entries pertaining to the revaluation have been recorded. 5. Interest on the mortgage loan of N$120000 was calculated correctly and has already been paid. 6. The company's credit controller, Mr Juan Montoya, performed an analysis of the company's debtors on 31 December 2021 . The analysis indicated that N$102000 of the outstanding debtors are expected not to be recoverable. The allowance for credit losses should be adjusted accordingly. Credit losses are considered part of the operating expenses. 7. The shareholders approved a final ordinary dividend of 50c per share 0n 31 December 2021. 8. It was decided on 31 December 2021 to transfer a further N$11300 to the general reserve. This transaction has not yet been recorded. 9. Assume a normal income tax rate of 28% Required: (comparative amounts are required where adequate information is available) (a) Prepare the following in accordance with the requirements of International Financial Reporting Standards (IFRS) and the Companies Act 28 of 2004: 1. Statement of Profit or loss and other comprehensive income for the year ended 31 December 2021 according to function of expenses. (15 Marks) 2. Statement of Financial position as at 31 December 2021. (15 Marks) 3. Statement of changes in equity for the year ended 31 December 2021. (15 Marks) 4. Notes to the financial statements as follows: (10 Marks) 4.1 Basis of presentation 4.2 Summary of significant accounting policies 4.3 Inventories 4.4 Trade and Other receivables 4.5 Property, Plant and Equipment