The following additional information is relevant for preparing financial statements for the year ended 31 March 2019 given below

TRIAL BALANCE:

Bank CR 30000

Land at fair value DB 6000000

Buildings at cost DB 3000000

Acc depreciation building CR 800000

PPE at cost DB 2400000

Acc depreciation PPE CR 500000

Vehicles at Cost DB 500000

Acc depreciation vehicles CR 170000

Contributed equity CR 8230000

Treasury stock DB 280000

Purchases DB 17300000

Directors fees DB 370000

Provision for doubtful debts CR 30000

Audit fees DB 40000

Donation DB 35000

Accounts payable CR 1000000

Sccounts receivable DB 2020000

Dividend income CR 200000

Dividend paid DB 300000

Interest expense DB 75000

Rental income CR 240000

Inventory as at 1 April 2018 DB 250000

Loan CR 1500000

Accounting fees DB 40000

Bank and services Charges DB 10000

Fines and penalties DB 11000

Entertainment expenses DB 25000

Distribution expenses DB 245000

insurance DB 40000

Advertising and promotion DB 59000

Retained earnings as at 1 April 2018 CR 320000

Revalutaion reserve as at 1 April 2018 CR 1000000

Investment in shares at cost DB 2400000

Sales CR 23200000

Salaraies and wages DR 1820000

Totals: DB 37220000 CR 37220000

information relevant for preparing financial statements for the year ended 31 march 2019:

• Bad debts of $20,000 are to be written off.
• Provision for doubtful debts is to be made at a rate of 2% on the balance of accounts receivable outstanding as at 31 March 2019.
• Depreciation for the year ended 31 March 2019 is to be provided on the following basis:
  • Land: No depreciation is to be provided.
  • Buildings: 2% on cost.
  • Plant and equipment: 15% reducing balance basis.
  • Vehicles: Based on mileage. The total mileage expected from the vehicles is 900,000 kilometres. For the year ended 31 March 2019 the mileage used was 135,000 kilometres.
• The 10% Secured Debentures of $1,500,000 was issued on 1 April 2018. Interest on the debentures is payable twice a year at 10% per annum. These debentures were issued at par ($100 per debenture) and they are redeemable at a premium of 2% on the 31 December 2025. The debentures are secured with Land & Buildings.
• Investment in shares comprises of shares available-for-sale $1,400,000 and shares held for trading $1,000,000. As at 31 March 2019, the market value of shares available-for-sale is $1,900,000 and market value of the shares held for trading is $1,600,000. These market values are considered to be the fair value of the shares.
• The cost of inventory as at 31 March 2019 is $225,000 and the net realisable value of the inventory is $200,000.
• A professional valuation consultant re-valued land on 31 March 2019 at $5,100,000 using fair value. The revaluation reserve as at 1 April 2018 was in respect of a previous revaluation on land.
• Building was re-valued for the first time. The new market value of the building as at 31 March 2019 is $2,000,000.The
• values of other non-current assets are as follows:

	As at 31 March 2019
	Value In Use	Net Selling price
Vehicles	$250,000	$245,000
Plant and Equipment	$2,200,000	$1,800,000

• The Inland Revenue Department will only tax the gains on the financial assets when realised. Fines, penalties and entertainment expenses are not deductible for tax purposes. Dividend income received is net of taxes. Assume a tax rate of 28%.
• Expenses are classified in the Statement of Comprehensive Income by function.
• Included in the contributed equity is an amount of $1,230,000 representing capital contribution of ordinary shares at $2.50 per share that were issued during the year.
• The accountant obtained information regarding sales. Products sold to the value of $5,000,000 were included in sales. This relates to 5 000 products the company did not deliver to customers yet, as a problem occurred in their distribution channels. It is unlikely that these products will be delivered before the publication of the annual financial statements
• A financial lease was obtained on 1 April 2018 for a period of 15 years. On this date the right of use asset was made available for use and this date is also the commencement date of the lease. The interest on this lease is paid in arrears. The lease was for a specialist machine the company will need in their production process. The present value of the lease payments amounts to $300,000 and the fair value of the machine is $320,000. The incremental borrowing rate is 3%. The first lease payment is due on 31 March 2019 of an amount of $19,000. Depreciation on the machine is calculated on a straight-line basis over the useful life of 15 years.

1. Prepare the journal entries to take into account the necessary adjustments in general

journal format for the year ended 31 March 2019. Ignore narrations.

(12 marks)

2. A single Statement of Profit & Loss and other Comprehensive Income for the year ended

31 March 2019.

(12 marks

3. A Statement of Financial Position as at 31 March 2019.

(12 marks)

4. Supplementary notes for 1) property, plant and equipment and 2) debentures reported in

the Statement of Financial Position as at 31 March 2019. (12 marks)

5. A Statement of Changes in Equity for the year ended 31 March 2019.