Question 4 (40 Marks) The Boatyard Limited is a distributor of boats that are used by fishermen and recreational users for ocean and freshwater use. The draft trial balance of the company for the year ended 31 December 20x6 is as follows: THE BOATYARD LIMITED DRAFT TRIAL BALANCE AT 31 DECEMBER 20X6 Debit Credit 2,000,000 1,592,500 5,000,000 1,100,000 550,000 2,000,000 800,000 675,000 2,225,000 1,477,500 Ordinary share capital Retained earnings Land: Cost Office equipment: Cost Office equipment: Accumulated depreciation Motor Vehicles: Cost Motor Vehicle: Accumulated depreciation Accounts receivable Inventory Cash and Bank Borrowings Accounts payable Sales Cost of Sales Salaries expense Bad debts expense Marketing Expense Depreciation: Motor vehicles Depreciation: Office equipment Repairs and maintenance Travel expense Other costs Interest expense Dividends declared 5,600,000 760,000 9,125,000 5,475,000 905,000 62,500 100,000 400,000 275,000 30,000 82,500 275,000 220,000 125,000 20,427,500 20,427,500 Additional information: The ordinary share capital consists of 1 600 000 share issued at N$1.25. N$500,000 of the borrowings are repayable on 31 July 20x7. . Dividends declared 125,000 20,427,500 20,427,500 Additional information: The ordinary share capital consists of 1 600 000 share issued at N$1.25. N$500,000 of the borrowings are repayable on 31 July 20x7. Boatyard Limited classifies expenses according to their function. Management categories the functions of the business into the areas of sales, administration and distribution. Salaries of N$555,000 relate to the administrative function and N$350,000 to the distribution function. The bad debts, marketing and depreciation on office equipment relate to the administration function. o The repairs and maintenance, travel and depreciation on motor vehicles relate to the distribution function. The other costs are all individually not material and relate N$162,500 to administration and N$ 112,500 to distribution. 9 Financial Accounting 1B (AFE3692) Individual Assignment Due date: 30 September 2021 . The land is being held with the intention of building its own distribution and viewing outlet thereon, so as to save on renting costs. Depreciation on office equipment is recognized on the straight line basis over for years with no residual value. The motor vehicles are all delivery vehicles used to deliver boats to customers. Depreciation on motor vehicles is recognized on the straight line basis over five years . There are no components of other comprehensive income. The financial statement has not yet been authorized for issue. REQUIRED: 1) Prepare the statement of profit or loss and other comprehensive income of the Boatyard Limited for the year ended 31 December 20x6 in accordance with International Financial Reporting Standards. (15 marks) 2) Prepare the current assets and current liabilities sections only of the statement of financial position the Boatyard Limited at 31 December 20x6 in accordance with International Financial Reporting Standards. (6 marks) 3) Prepare the statement of changes in equity of Boatyard Limited for the year ended 31 December 20x6 in accordance with International Financial Reporting Standards. (7 marks) . . 4) Prepare the following notes to the financial statements to comply with International Financial Reporting Standards and Companies Act: (12 marks) Statement of compliance Basis of preparation Accounting policies for land, office equipment, motor vehicles, and inventory Trade and other receivables Trade and other payables Dividends. . . . 10
