QUESTION ONE The following trial balance relates to Zambezi Ltd at 31 December 2019 Cr 50,000,000 11,200,000 6 0,000,000 94,500,000 20,000,000 24,500,000 Equity shares at 50 ngwee each Retained earnings at 1 January 2019 Land and buildings at cost (land K10 million) noteii Plant and Equipment at cost-note i Accumulated depreciation at 1 January 2019-buildings Accumulated depreciation at 1 January 2019 - plant and equipment Inventory at 31 December 2019 Trade receivables Bank overdraft Deferred tax-note ili Trade payables Revenue Cost of sales Distribution costs Administrative expenses Bank interest Current tax-note ili Total 43,700,000 42,200,000 6,800,000 6,200,000 35,100,000 550,000,000 411,500,000 21,500,000 30.900,000 700.000 1,200,000 705,000,000 705,000,000 The following information is relevant: 0) At 31 December 2019, a provision is required for the directors' bonuses equal to 1% of revenue for the year. (11) Non-current assets On 1 June 2019, Zambezi Ltd terminated the production of one of its product lines. From this date, the plant used to manufacture the product has been actively marketed at an advertised price of K4.2 million which is considered realistic. It is included in the trial balance at a cost of K9 million with accumulated depreciation (at 1 January 2019) of K5 million. On 1 January 2019, the directors of Zambezi Ltd decided that the financial statements would show an improved position if the land and buildings were revalued to market value. At that stage, an independent valuer valued the land at K12 million and the buildings at K35 million and these valuations were accepted by the directors. The remaining life of the buildings at the date was 14 years. Zambezi Ltd does not make a transfer to retained earnings for excess depreciation. Ignore deferred tax on the revaluation surplus. Plant and equipment is depreciated at 20% per annum using the reducing balance method and time apportioned as appropriate. All depreciation is charged to cost of sales, but has yet been charged on any non-current assets for the year ended 31 December 2019. (II) Zambezi Ltd estimates that an income tax provision of K27.2 million is required for the year ended 31 December 2019 and at that date the liability to deferred tax is K9.4 million. The movement on deferred tax should be taken to profit and loss. The balance on current tax in the trial balance represents the underlover provision of the tax liability for the year ended 31 December 2018. Required: (a) Prepare the statement of profit or loss and other comprehensive income for the year ended 31 December 2019. [7.5 Marks] (b) Prepare a statement of changes in equity as at 31 December 2019. (2.5 Marks] (c) Prepare a statement of financial position as at 31 December 2019. (7.5 Marks] [TOTAL: 20 Marks] QUESTION ONE The following trial balance relates to Zambezi Ltd at 31 December 2019 Cr 50,000,000 11,200,000 6 0,000,000 94,500,000 20,000,000 24,500,000 Equity shares at 50 ngwee each Retained earnings at 1 January 2019 Land and buildings at cost (land K10 million) noteii Plant and Equipment at cost-note i Accumulated depreciation at 1 January 2019-buildings Accumulated depreciation at 1 January 2019 - plant and equipment Inventory at 31 December 2019 Trade receivables Bank overdraft Deferred tax-note ili Trade payables Revenue Cost of sales Distribution costs Administrative expenses Bank interest Current tax-note ili Total 43,700,000 42,200,000 6,800,000 6,200,000 35,100,000 550,000,000 411,500,000 21,500,000 30.900,000 700.000 1,200,000 705,000,000 705,000,000 The following information is relevant: 0) At 31 December 2019, a provision is required for the directors' bonuses equal to 1% of revenue for the year. (11) Non-current assets On 1 June 2019, Zambezi Ltd terminated the production of one of its product lines. From this date, the plant used to manufacture the product has been actively marketed at an advertised price of K4.2 million which is considered realistic. It is included in the trial balance at a cost of K9 million with accumulated depreciation (at 1 January 2019) of K5 million. On 1 January 2019, the directors of Zambezi Ltd decided that the financial statements would show an improved position if the land and buildings were revalued to market value. At that stage, an independent valuer valued the land at K12 million and the buildings at K35 million and these valuations were accepted by the directors. The remaining life of the buildings at the date was 14 years. Zambezi Ltd does not make a transfer to retained earnings for excess depreciation. Ignore deferred tax on the revaluation surplus. Plant and equipment is depreciated at 20% per annum using the reducing balance method and time apportioned as appropriate. All depreciation is charged to cost of sales, but has yet been charged on any non-current assets for the year ended 31 December 2019. (II) Zambezi Ltd estimates that an income tax provision of K27.2 million is required for the year ended 31 December 2019 and at that date the liability to deferred tax is K9.4 million. The movement on deferred tax should be taken to profit and loss. The balance on current tax in the trial balance represents the underlover provision of the tax liability for the year ended 31 December 2018. Required: (a) Prepare the statement of profit or loss and other comprehensive income for the year ended 31 December 2019. [7.5 Marks] (b) Prepare a statement of changes in equity as at 31 December 2019. (2.5 Marks] (c) Prepare a statement of financial position as at 31 December 2019. (7.5 Marks] [TOTAL: 20 Marks]