The following trial balance relates to Binkabi Ltd as at 30 September 2017:

GH'000 GH'000

Revenue (Note (i)) 380,000

Cost of sales 246,800

Distribution costs 17,400

Administrative expenses (Note (ii)) 50,500

Loan interest paid (Note (iii)) 1,000

Investment income 1,300

Profit on sale of investments (Note (iv)) 2,200

Current tax (Note (v)) 2,100

Freehold property at cost 1 October 2017 (note (vi)) 63,000

Plant and equipment at cost (Note (vi)) 42,200

Brand at cost 1 October 2013 (Note (vi)) 30,000

Accumulated depreciation 1 October 2016 building 8,000

plant and equipment 19,700

Accumulated amortisation 1 October 2016 brand 9,000

Investments in equity instruments (Note (iv)) 26,500

Inventory at 30 September 2017 38,000

Trade receivables 44,500

Bank 8,000

Trade payables 42,900

Ordinary shares 52,000

Retained Earnings at 1 October 2016 26,060

Other reserve at 1 October 2016 (Note (iv)) 5,000

5% convertible loan note 2020 (Note (iii)) 18,440

Deferred tax (Note (v)) _______ 5,400

570,000 570,000

Additional Information:

i) Binkabi Ltd's revenue includes GH16 million for goods sold to Kofi on 1 October 2016.

The terms of the sale are that Binkabi Ltd will incur ongoing service and support costs of

GH1.2 million per annum for three years after the sale. Binkabi Ltd normally makes a

gross profit of 40% on such servicing and support work. Ignore the time value of money.

ii) Administrative expenses include an equity dividend of 12 million paid during the year.

iii) The 5% convertible loan note was issued for proceeds of 20 million on 1 October 2015.

It has an effective interest rate of 8% due to the value of its conversion option.

iv) During the year Binkabi Ltd sold an equity investment for GH11 million. At the date of

sale it had a carrying amount of GH8.8 million and had originally cost GH7 million.

Binkabi Ltd has recorded the disposal of the investment. The remaining equity

investments (the GH26.5 million in the trial balance) have a fair value of GH29 million

at 30 September 2017. The other reserve in the trial balance represents the net increase in

the value of the equity investments as at 1 October 2016. Binkabi Ltd made an

irrevocable decision at initial recognition of these instruments to recognise all changes in

fair value through other comprehensive income, and makes a transfer of realised profit

from the other reserve to income surplus on disposal of the investments. Ignore deferred

tax on these transactions.

v) The balance on current tax represents the under/over provision of the tax liability for the

year ended 30 September 2016. The directors have estimated the provision for income tax

for the year ended 30 September 2017 at GH16.2 million. At 30 September 2017 the

carrying amounts of Binkabi Ltd's net assets were GH13 million in excess of their tax

base. The income tax rate of Binkabi Ltd is 30%.

vi) Non-current assets

The freehold property has a land element of GH13 million. The building element is

being depreciated on a straight-line basis. Plant and equipment is depreciated at 40% per

annum using the reducing balance method. Binkabi Ltd's brand in the trial balance relates

to a product line that received bad publicity during the year which led to falling sales

revenues. An impairment review was conducted on 1 April 2017 which concluded that,

based on estimated future sales, the brand had a value in use of GH12 million and a

remaining life of only three years. However, on the same date as the impairment review,

Binkabi Ltd received an offer to purchase the brand for GH15 million.

Prior to the impairment review, it was being depreciated using the straight-line method

over a 10 year life. No depreciation/amortisation has yet been charged on any non-current

asset for the year ended 30 September 2017. Depreciation, amortisation and impairment

charges are all charged to cost of sales.

Required:

a) Prepare the statement of profit or loss and other comprehensive income for Binkabi Ltd

for the year ended 30 September 2017. (8 marks)

b) Prepare the statement of financial position of Binkabi Ltd as at 30 September 2017.