The

following trial balance relates to Kanyembo as at $30$ September $2012$:

The following notes are relevant:

$($i$)$ On $1$ October $2011,$ Kanyembo sold one of its products for K$10$ million $($included in revenue in the

trial balance$).$

As

part of the sale agreement, Kanyembo is committed to the ongoing servicing of

this product until $30$ September $2014($i$.$e$.$ three years from the date of sale$).$

The value of this service has been included in the selling price of K$10$

million. The estimated cost to Kanyembo of the servicing is K$600,000$ per annum

and Kanyembo's normal gross profit margin on this type of servicing is $25\%.$

Ignore discounting.

$($ii$)$ Kanyembo issued a K$25$ million $6\%$ loan

note on $1$ October $2011.$ Issue costs were K$1$ million and these have been charged

to administrative expenses. The loan will be redeemed on $30$ September $2014$ at a

premium which gives an effective interest rate on the loan of $8\%.$

$($iii$)$ Kanyembo paid an equity dividend of $8$

cents per share during the year ended $30$ September $2012.$

$($iv$)$ Non$-$current assets:

Kanyembo had been carrying land and buildings at depreciated cost, but

due to a recent rise in property prices, it decided to revalue its property on

$1$ October $2011$ to market value. An independent valuer confirmed the value of

the property at K$60$ million $($land element K$12$ million$)$ as at that date and the

directors accepted this valuation.

The property had a remaining life of $16$ years at the date of its

revaluation. Kanyembo will make a transfer from the revaluation reserve to

retained earnings in respect of the realisation of the revaluation reserve.

Ignore deferred tax on the revaluation.

Plant and equipment is depreciated at $15\%$ per annum using the reducing

balance method.

No depreciation has yet been charged on any non$-$current asset for the year ended $30$ September

All depreciation is charged to cost of sales.

$($v$)$ The investments had a fair value of K$15\mathrm{.}7$ million as at $30$ September $2012.$ There were no

acquisitions or disposals of these investments during the year ended $30$ September $2012.$

$($vi$)$ The balance on current tax represents the

under$/$over provision of the tax liability for the year ended $30$ September $2011.$

A provision for income tax for the year ended $30$ September $2012$ of K $7\mathrm{.}4$ million

is required. At $30$ September $2012,$ Kanyembo had taxable temporary differences

of $K5$ million, requiring a provision for deferred tax. Any deferred tax

adjustment should be reported in the income statement. The income tax rate of Kanyembo

is $20\%.$

Required:

$($a$)$ Prepare the

statement of comprehensive income for Kanyembo for the year ended $30$ September

$($b$)$ Prepare the statement of changes in equity for Kanyembo for the year ended $30$ September

$(5$ Marks$)$

$($c$)$ Prepare the statement of financial position for Kanyembo

as at $30$ September $2012.(10$markS$)$