Question Two JUBILEE is a quoted company reporting under IFRSs. During the year end 31 December  2012, the company changed its accounting policy with respect to property valuation. There  are also a number of other issues that need to be finalised before the financial statements can  be published. JUBILEE’s trial balance from the general ledger at 31 December 2012 showed the following  balances: GH¢’m GH¢’m Revenue  2,648 Loan note interest paid 3 Purchases 1,669 Distribution costs 514 Administrative expenses 345 Interim dividend paid 6 Inventories at 1 January 2012 444 Trade receivables 545 Trade payables 434 Cash and cash equivalents 28 50Gp ordinary shares 100 Capital surplus 814 Retained earnings at 1 January 2012 349 4% loan note repayable 2018 (issued 2010) 150 Land and buildings: Cost (including GH¢60m land)  380  Accumulated depreciation at 1/1/2012 64 Plant and equipment: Cost  258  Accumulated depreciation at 1/1/2012 126 Investment property at 1 January 2012 548 Rental income 48 Proceeds from sale of equipment 7 , 4,740 4,740 Further information to be taken into account: i. Closing inventories were counted and amounted to GH¢388m at cost. However,  shortly after the year end out-of-date inventories with a cost of GH15m were sold  for GH¢8m. ii. The company decided to change its accounting policy with respect to its 10 year old  land and buildings from the cost model to the revaluation model. The revalued  amounts at 1 January 2012 were GH¢800m (including GH¢100m for the land).  No further revaluation was necessary at 31 December 2012. The company wishes  to treat the revaluation surplus as being realised over the life of the asset.   iii. Due to a change in the company’s product portfolio plans, an item of plant with a  carrying value GH¢22m at 31 December 2012 (after adjusting for depreciation for  the year) may be impaired due to a change in use. An impairment test conducted  at 31 December, revealed its fair value less costs to sell to be GH¢16m. The asset  is now expected to generate an annual net income stream of GH¢3.8m for the next  5 years at which point the asset would be disposed for GH¢4.2m. an appropriate  discount rate is 8%. 5 year discount factors at are: Simple  Cumulative 0.677 3.993 iv. The income tax liability for the year is estimated at GH¢27m. Ignore deferred tax. v. An interim dividend of 3Gp per share was paid on 30 June 2012. A final dividend of  1.5Gp per share was declared by the directors on 28 January 2013. No dividends  were paid or declared in 2011. vi. During the year, Jubilee disposed of some malfunctioning equipment for GHC7m. the  equipment had cost GH¢15m and had accumulated depreciation brought forward  at 1 January 2012 of GH¢3m.  There were no other additions or disposals to property, plant and equipment  vii. The company treats depreciation on plant and equipment as a cost of sale and land  and buildings as an administration cost. Depreciation rates as per the company’s  accounting policy note are as follows: Buildings  Straight line over 50 years Plant and equipment 20% reducing balance Jubilee’s accounting policy is to charge a full year’s depreciation in the year of an  asset’s purchase and none in the year of disposal.  viii. During the year on 1 July 2012, Jubilee made a 1 for 4 bonus issue, capitalising its  general reserve. This transaction had not yet been accounted for. The fair value of  the company’s shares on the date of the bonus issue was GH¢0.50 each.  ix. Jubilee uses the fair value model of IAS 40. The fair value of the investment property  at 31 December 2012 was GH¢586m. Required  Prepare the following financial statements in with IFRSs insofar as the information permits. a. Statement of comprehensive income for the year ended 31 December, 2012  b. Statement of changes in equity for the year ended 31 December, 2012 c. Statement of financial position as at 31 December, 2012   *Notes are not required but all workings should be clearly shown.