QUESTION TWO

Nora Ltd are specialist wholesalers. This is their trial balance at 31 December 2021

Notes:

Stock at 31.12.2021: K412,780, consists of goods for resale.

Plant and machinery is apportioned: distributive 60 per cent; administrative 40 per cent.

Accrue auditors remuneration: K71,000.

Depreciate plant and machinery: 20 per cent on cost.

Of the motor hire, K55,000 is for distributive purposes.

Corporation tax on profits, at a rate of 35 per cent, is estimated at K238,500, and is payable on 1.10.2022.

All of the sales are of one type of goods. Net sales of K3,620,000 have been made in Zambia, and are shown net of VAT.

Pension contributions for staff amounted to K42,550 and social security contributions to K80,120. These figures are included in wages and salaries in the trial balance. No employee earned over K30,000.

Plant of K75,000 had been bought during the year.

Directors remuneration has been as follows:

K

Chairman 46,640

Managing Director 51,500

Finance Director 46,000

Marketing Director 43,000

187,140

In addition, each of them drew K2,000 as directors fees. Pensions are the personal responsibility of directors.

Required:

Prepare a statement of profit or loss account and other comprehensive income as at 31 December, 2021 in accordance with IAS1. (10 Marks)

Prepare a statement of financial position for the year ended December 31, 2021 in accordance with IAS1. (10 Marks)

Nora Ltd are specialist wholesalers. This is their trial balance at 31 December 2021 Nora Ltd are specialist wholesalers. This is their trial balance at 31 December 2021