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

Revenue (Note (i))	GH'000	GH'000 380,000
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
10% 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 on sale-or-return basis. As at September 30, 2017, records indicate that Kofi had sold 40% of the goods. The goods were invoiced to Kofi at 12% margin.

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

iii) The 10% loan note was issued on 1 October 2015. The repayment of the loan is due in three years time.

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

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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/amortization has yet been charged on any non-current asset for the year ended 30 September 2017. Depreciation, amortization 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.

(12 marks) (Total: 20 marks