The following is the trial balance of Kwei Limited, a dealer in Oracle Software, as at 31 December, 2018. Purchases and Sales Ordinary shares (GHCL.00 per share) Retained earnings Revaluation Reserve Trade Receivables and Payables Inventory Land and building cost) Delivery Vans (cost) Accumulated depreciation (31 December, 2015 Plant and Equipment (cost) Accumulated depreciation (31 December 2015) Administrative expenses Selling and Distribution expenses Investment property Investment income Cash and cash equivalents Dividend paid Provision for doubtful debts Bad debts Suspense GH GHO 243,750 490.500 221.500 60,000 10.00 199,000 Sion 99,000 125,000 105.500 32.500 90,000 37.500 26,000 27.500 100,000 35.000 27,000 1,750 14.000 17.500 2000 022.000 1.022.000 Additional information available is given below: 1) The inventory at cost on 31. December, 2018 was valued at GH137,500 and the net realizable value was GH129,500. 2) Allowance for doubtful debt is to be increased to GH18,750 as at 31 December 2018. 3) An amount of GH7250 in respect of rent and rates is included in administrative expenses. This amount relates to 2018 financial year. 4) Depreciation for the year ended 31 December 2018 is to be calculated using the following rates: Plant and equipment 15% on cost Administrative expense Delivery Vans 20% on Distribution cost. s) To reflect a marked increase in property prices, Kwei Limited accepted the report of an independent surveyor who valued the land and building up by GH15,000 on that on 31" December 2018. .) The audit fee of GH1,000 is to be accrued. >> The suspense account represents the corresponding credit for cash received for a fully subscribed issue of equity shares made on 30 December 2018. The terms of the share issue was 35,000 new ordinary shares were issued at GH2 each. 3) The directors have estimated the provision for income tax for the year ended 31 December 2018 at GH15,000. cost Required: Accumulated depreciation (31 December 2015 Plant and Equipment (cost) Accumulated depreciation (31 December 2015) Administrative expenses Selling and Distribution expenses Investment property Investment income Cash and cash equivalents Dividend paid Provision for doubtfuldebts Bad debts Suspense 32.500 90,000 37.00 26,000 27.500 100,000 35.00 27.000 1.750 14.000 17.500 70 000 022.000 1022.00 Additional information available is given below: 1) The inventory at cost on 31 December, 2018 was valued at GH137,500 and the net realizable value was GH129,500 2) Allowance for doubtful debt is to be increased to GH18,750 as at 31" December 2018. 3) An amount of GH7250 in respect of rent and rates is included in administrative expenses. This amount relates to 2018 financial year. 4) Depreciation for the year ended 31 December 2018 is to be calculated using the following rates: Plant and equipment 15% on cost Administrative expense Delivery Vans 20% on cost Distribution cost. 5) To reflect a marked increase in property prices, Kwei Limited accepted the report of an independent surveyor who valued the land and building up by GH15,000 on that on 31" December 2018. The audit fee of GH1,000 is to be accrued. 2) The suspense account represents the corresponding credit for cash received for a fully subscribed issue of equity shares made on 30 December 2018. The terms of the share issue was 35,000 new ordinary shares were issued at GH2 each. 3) The directors have estimated the provision for income tax for the year ended 31" December 2018 at GH15,000. Required: In compliance with the Companies Act provisions and in conformity with relevant International Financial Reporting Standards, prepare for publication; (1) The statement of profit or loss and other comprehensive income for the year ended 31 December, 2018. (ii) The statement of changes in equity for the year ended 31 December, 2018 (iii) The statement of financial position as at 31 December, 2018. a. Questions 2 Luciana Ltd owned 100% of the equity share capital of Lucito Ltd. A wholly owned subsidiary. The assets at the reporting date of Lucito Ltd were as follows: GH Goodwill 2,880 Buildings 7,200 Plants and Equipment 6.240 Other intangibles 2,400 Receivables and cash 1,680 On the reporting date a fire within one of Lucito Ltd's buildings led to an impairment review being carried out. The recoverable amount of the business was determined to be GH 11,760 The fire destroyed some plant and equipment with a carrying value of GH C 1,440 and there was no option but to scrap it. The other intangibles consist of a license to operate Sharon's plant and equipment. Following the scrapping of some of the plant and equipment a competitor offered to purchase the patent for GH C 1,800 The receivables and cash are both stated at their realizable value and do not require impairment. You are required to show how the impairment loss in Lucito Ltd is allocated amongst the assets. 10 marks You are required to: Identify and explain the five (5) elements of financial statements in line with the IASB Conceptual Framework for Financial Reporting as used in IAS 1. 5 marks Total Marks 15 The country is Ghana The following is the trial balance of Kwei Limited, a dealer in Oracle Software, as at 31 December, 2018. Purchases and Sales Ordinary shares (GHCL.00 per share) Retained earnings Revaluation Reserve Trade Receivables and Payables Inventory Land and building cost) Delivery Vans (cost) Accumulated depreciation (31 December, 2015 Plant and Equipment (cost) Accumulated depreciation (31 December 2015) Administrative expenses Selling and Distribution expenses Investment property Investment income Cash and cash equivalents Dividend paid Provision for doubtful debts Bad debts Suspense GH GHO 243,750 490.500 221.500 60,000 10.00 199,000 Sion 99,000 125,000 105.500 32.500 90,000 37.500 26,000 27.500 100,000 35.000 27,000 1,750 14.000 17.500 2000 022.000 1.022.000 Additional information available is given below: 1) The inventory at cost on 31. December, 2018 was valued at GH137,500 and the net realizable value was GH129,500. 2) Allowance for doubtful debt is to be increased to GH18,750 as at 31 December 2018. 3) An amount of GH7250 in respect of rent and rates is included in administrative expenses. This amount relates to 2018 financial year. 4) Depreciation for the year ended 31 December 2018 is to be calculated using the following rates: Plant and equipment 15% on cost Administrative expense Delivery Vans 20% on Distribution cost. s) To reflect a marked increase in property prices, Kwei Limited accepted the report of an independent surveyor who valued the land and building up by GH15,000 on that on 31" December 2018. .) The audit fee of GH1,000 is to be accrued. >> The suspense account represents the corresponding credit for cash received for a fully subscribed issue of equity shares made on 30 December 2018. The terms of the share issue was 35,000 new ordinary shares were issued at GH2 each. 3) The directors have estimated the provision for income tax for the year ended 31 December 2018 at GH15,000. cost Required: Accumulated depreciation (31 December 2015 Plant and Equipment (cost) Accumulated depreciation (31 December 2015) Administrative expenses Selling and Distribution expenses Investment property Investment income Cash and cash equivalents Dividend paid Provision for doubtfuldebts Bad debts Suspense 32.500 90,000 37.00 26,000 27.500 100,000 35.00 27.000 1.750 14.000 17.500 70 000 022.000 1022.00 Additional information available is given below: 1) The inventory at cost on 31 December, 2018 was valued at GH137,500 and the net realizable value was GH129,500 2) Allowance for doubtful debt is to be increased to GH18,750 as at 31" December 2018. 3) An amount of GH7250 in respect of rent and rates is included in administrative expenses. This amount relates to 2018 financial year. 4) Depreciation for the year ended 31 December 2018 is to be calculated using the following rates: Plant and equipment 15% on cost Administrative expense Delivery Vans 20% on cost Distribution cost. 5) To reflect a marked increase in property prices, Kwei Limited accepted the report of an independent surveyor who valued the land and building up by GH15,000 on that on 31" December 2018. The audit fee of GH1,000 is to be accrued. 2) The suspense account represents the corresponding credit for cash received for a fully subscribed issue of equity shares made on 30 December 2018. The terms of the share issue was 35,000 new ordinary shares were issued at GH2 each. 3) The directors have estimated the provision for income tax for the year ended 31" December 2018 at GH15,000. Required: In compliance with the Companies Act provisions and in conformity with relevant International Financial Reporting Standards, prepare for publication; (1) The statement of profit or loss and other comprehensive income for the year ended 31 December, 2018. (ii) The statement of changes in equity for the year ended 31 December, 2018 (iii) The statement of financial position as at 31 December, 2018. a. Questions 2 Luciana Ltd owned 100% of the equity share capital of Lucito Ltd. A wholly owned subsidiary. The assets at the reporting date of Lucito Ltd were as follows: GH Goodwill 2,880 Buildings 7,200 Plants and Equipment 6.240 Other intangibles 2,400 Receivables and cash 1,680 On the reporting date a fire within one of Lucito Ltd's buildings led to an impairment review being carried out. The recoverable amount of the business was determined to be GH 11,760 The fire destroyed some plant and equipment with a carrying value of GH C 1,440 and there was no option but to scrap it. The other intangibles consist of a license to operate Sharon's plant and equipment. Following the scrapping of some of the plant and equipment a competitor offered to purchase the patent for GH C 1,800 The receivables and cash are both stated at their realizable value and do not require impairment. You are required to show how the impairment loss in Lucito Ltd is allocated amongst the assets. 10 marks You are required to: Identify and explain the five (5) elements of financial statements in line with the IASB Conceptual Framework for Financial Reporting as used in IAS 1. 5 marks Total Marks 15 The country is Ghana