Question One:

The following data extracted from the trial balance of ABC Company on Dec 31^st 2020:

Financial Statement item

Amount

Financial Statement Item

Amount

Buildings

1,200,000

Motor vehicles - Accumulated depreciations

180,000

Cash

320,000

Depreciation expenses

630,000

Sales revenues

16,000,000

Purchases returns and allowance

96,000

Sales commission

120,000

Interest expenses

1,150,000

Travel expense - sale

75,000

Gains on sale of lands

455,000

Equipment

840,000

Notes payable

2,890,000

Account payable

420,000

Equipment - accumulated depreciation

440,000

Goodwill

3,000,000

Impairment loss - equipment

260,000

Purchases

6,400,000

Accumulated unrealized gains of non-trading securities

265,000

Trading securities

1,460,000

Sales returns and allowance

215,000

Account receivables

810,000

Customs and taxes - purchases

1,045,000

License

475,000

Utilities expenses

167,500

Audit fees

90,000

Customer list

300,000

Freight -in

85,000

Loss due to an earthquake damage

618,000

Repair expenses

76,000

Interest revenues

148,000

Purchases discount

128,000

loss on operation of the disposed division

195,000

Beginning inventory

1,487,500

Legal and accounting expenses

47,000

Share capital - ordinary

4,250,000

Buildings - Accumulated depreciation

280,000

Advertising expenses

630,000

Unearned revenues

215,000

Supplies

112,000

Furniture and computers

350,000

Prepaid insurance

120,000

Leasing liabilities

3,400,000

Notes receivables

1,650,000

Share premium - preference

675,000

Bonds payables

5,000,000

Share premium - treasury

180,000

Wages payable

62,000

Retained earnings

??

Dividends revenues

243,000

Accumulated revaluation surplus

220,000

Sales discount

145,000

Non-trading securities

5,575,000

Trade payables

88,000

Gains on currency exchange

140,000

Lands

3,050,000

Legal reserve

312,500

Delivery expenses

313,000

Share premium - ordinary

2,000,000

Rent expenses

94,000

Patent

960,000

Insurance expense

40,000

Treasury shares (400,000 * 3)

1,200,000

Motor vehicles

1,550,000

Held to maturity investment

3,417,000

Revaluation surplus

150,000

Salaries and wages expenses

1,180,000

Share capital - preference

2,000,000

Investment in preference shares

2,100,000

Franchise

1,450,000

Allowance for doubtful accounts

60,000

Mortgage payable

900,000

Loss on disposal of Salmya Branch' assets

324,000

Dividends declared

700,000

Loss on sales of trading securities

81,500

Land for speculations

650,000

Buildings to lease out

1,850,000

Additional Information that was not included in the trial balance:

-The number of ordinary shares is 10,000,000 shares authorized, 4,250,000 issued and 3,850,000 outstanding.

-There are10 KD par, (10%), 200,000 authorized, issued and outstanding preference shares.

-10% of the account receivables will be collected in 2022.

-The insurance policy was purchased on Jan 1^st 2020 for 160,000 KD and covers 4 years. One fourth of the amount was expensed as insurance expense during 2020 and the rest 120,000 will be expensed over the coming three years.

-50,000 KD of the mortgage payable due during next year.

-200,000 KD of the dividends declared foe preference shares

-150,000 KD of the notes receivables due next year

-Salaries and wages expenses are 60% sales and 40% offices

-Depreciation expenses are 20% sales and 80% offices.

-Ending inventories was evaluated at 1,225,000 KD on Dec 31^st 2020

-400,000 KD of the leasing liabilities due next year.

-Utilities expenses are 30% sales and 70% offices.

-490,000 KD of the notes payable due next year.

-Fair value of trading securities on Dec 31^st 2020 is 1,615,000 KD

-Fair value of non-trading securities on Dec 31^st 2020 is 6,450,000 KD

-Goodwill was revalued during the period at 4,000,000 KD.

-Patent was impaired by 260,000 but it has not been recognized.

-The company is subject to 30% income tax on all items.

Required:

1.Prepare trial balance for ABC Company on Dec 31^st 2020 and calculate retained earnings beginning balance?

2.Prepare statement of comprehensive income, retained earnings statement and statement of financial position for ABC Company in good format and according to the requirements of IAS 1?