QUESTION 4 (Accounting Policies, Changes in Accounting Policies and Errors: IAS 8) (20 marks) Good living Ltd has the following abridged Trial balances for the years ended 30 June 2018 and 2019 2019 2018 N$ N$ Gross profit (30 000) (20 000) Retained earnings beginning of the year 10 880 7 000 Share capital 2 000 2 000 Profit on disposal of land 2 000 - Dividends paid 1 000 1 000 Income tax expense 3 120 1 920 Net current assets 8 000 1 200 Other expenses 16 000 10 000 Machinery at cost 18 000 18 000 Machinery accumulated depreciation 11 200 8 000 Depreciation (straight-line @ 20% per annum) 3 200 3 200 stationery 3 000 -

Additional information Note 1 The stationery expense of N$3 000 relating to 2018 was paid in 2019 and arose in 2018 only after the companys auditors found an underpayment of stationery expenses relating to 2018.The expense was never recorded in 2018. The amount is said to be material for Good Living company. Note 2 The board of directors of Good Living Ltd re-estimated the residual value of the machinery to be N$1 400. The original value was N$2 000. No machinery was purchased or disposed since 2017. Note 3 The share capital of Good Living has remained constant for some time and the Directors of Good Living are thinking of financing construction of a manufacturing plant starting June 2020. Note 4 Ignore tax implications of the above items and maintain taxation as given above. Note 5 The following figures are also provided, Revenue (2018, N$40 000:2019, N$ 60 000. Gross profit on sales percent has been constant for both 2018 and 2019 @ 50%. Required: 4.1 Prepare the Statement of Profit or Loss and other comprehensive income for year ended 30 June 2019 in accordance with the requirements of IFRS(8) 4.2 Prepare the Statement of changes in equity showing the retained earnings only(5) 4.3 Notes to the financial statements relating to the change in accounting estimates and prior period errors(7) Total 20

MTC-Wear Your Mer Thie 190% 5:39 2020 Distance Assignm... @ + QUESTION 4 (crowning Policies Change in Accounting Policies and Emo AS3120 Cond living Lad has the following ahedged Trul balance for the years del 2018 2010 NS 2019 NS 1900 10 SS 2000 G Reid aming housing of the year Share Procodiplofland Deshal 7000 1 Net 000 16 000 IN 000 Machinery TEL DELO ES sm 30 Depricelise 20 30 The aty expense of N8300ding ba 2011 paid in 2019 and we in 2018 only after the company's maid an underpanostationery creating to 2018. The espere a vede in 2018. The cast is said to be trial for God Living The board of dins God Living Lared the resulterechy NSSI 400. The originale $2.000 Nomiery was perched or de cine 2017 Theta capital of Good Lilages are cotator and the Doctor of God Living are thinking of financing centre de medicin plan starting June 200. Ignorlax inplicies of the above mentiones ive bere Page 1920 NS The following is also pred 2018 2019, No Gas precitals ha tamil as am 41 Prepare the west of Profit or loss and other compresive warded 2019 in race with the RS Prepare the Schoeges in pity showing the and carin Now the ancies relating the change in ting Students 43 END OF A MTC-Wear Your Mer Thie 190% 5:39 2020 Distance Assignm... @ + QUESTION 4 (crowning Policies Change in Accounting Policies and Emo AS3120 Cond living Lad has the following ahedged Trul balance for the years del 2018 2010 NS 2019 NS 1900 10 SS 2000 G Reid aming housing of the year Share Procodiplofland Deshal 7000 1 Net 000 16 000 IN 000 Machinery TEL DELO ES sm 30 Depricelise 20 30 The aty expense of N8300ding ba 2011 paid in 2019 and we in 2018 only after the company's maid an underpanostationery creating to 2018. The espere a vede in 2018. The cast is said to be trial for God Living The board of dins God Living Lared the resulterechy NSSI 400. The originale $2.000 Nomiery was perched or de cine 2017 Theta capital of Good Lilages are cotator and the Doctor of God Living are thinking of financing centre de medicin plan starting June 200. Ignorlax inplicies of the above mentiones ive bere Page 1920 NS The following is also pred 2018 2019, No Gas precitals ha tamil as am 41 Prepare the west of Profit or loss and other compresive warded 2019 in race with the RS Prepare the Schoeges in pity showing the and carin Now the ancies relating the change in ting Students 43 END OF A