QUESTION 5 The profit before tax as reflected in the draft statement of comprehensive income of Sword Limited for the financial years ended 31 December 2020 and 31 December 2021 respectively was as follows: Profit before tax Additional information 2021 2020 N$ N$ 1 661 000 950 000 The following items have not yet been accounted for in the above-mentioned draft statement of comprehensive income of Sword Limited: 1. The board of directors decided on 31 December 2021, after completing the draft statement of comprehensive income, to change the accounting policy with respect to the inventory valuation from the weighted average method to the first-in, first-out method in order to comply with Generally Accepted Accounting Practice. Inventory is valued as follows using both methods: Weighted average method First-in, first-out method 2019 2020 2021 N$ 62 000 N$ 132 000 N$ 226000 67 000 167 400 263 500 2. Retained earnings at 31 December 2019 amounted to R150 000. 3. During the current year the accountant found a batch of sales invoices, not processed due to misfiling, to the value of R90 000 (excluding VAT) for the year ended 31 December 2020. The sales invoices were filed in the order pending file instead of the sales invoice file. However, the cost of sales associated with these invoices were taken into account in 2020. The effect thereof is considered material on the financial statements. 4. The current tax rate of 28% has remained unchanged for the past 5 years. 5. Ignore tax implications. 6. The implications of Value Added Tax must be ignored. Required: Prepare the statement of comprehensive income, statement of changes in equity (only the retained earnings section) and only the following notes to the annual financial statements of Sword Limited for the year ended 31 December 2021: . Change in accounting policy Error Marks