The following information has been extracted from the books of Baba Ltd for the year to 31 December 2018. DR GH¢ CR GH¢ Sales 3,250,000 Purchases 1,175,000 Administrative expenses 425,000 Interest paid Share capital (ordinary shares of GH¢1 each) 12,500 500,000 Dividend 15,000 Cash at bank and in hand 22,500 Income tax (remaining balance from previous year) Provision for doubtful debt 25,000 225,000 Distribution costs 600,000 Land at cost Buildings: At Cost 275,000 250,000 Accumulated depreciation (at 1 Jan 2018) 120,000 Plant and machinery: At cost Accumulated depreciation (at 1 Jan 2018) 312,500 187,500 Retained earnings (at 1 Jan 2018) 675,000 10% Loan note Inventory (at 1 Jan 2018) 375,000 200,000 Trade receivables and Payables 1,820,000 150,000 5307500 5307500 Additional information Inventory cost at 31 December 2018 was valued at GH¢625,000 but this can be sold for GH¢750,000 with a related selling cost of GH¢112,500. The land was revalued to GH¢375,000 at the end of the year. Buildings are depreciated on a straight-line basis (assuming no residual value) at 5% whiles Plant and machinery is depreciated using a reducing Balance Method at 20% The depreciation charges for the year are to be apportioned as follows: Cost of sales 30%; Administrative expenses 40%; Distribution costs 30% Income taxes for the year are estimated to be GH¢300,000. The year-end provision for doubtful debt is to be increased to GH¢250,000. Provision for doubtful debts is charged to Distribution Cost. Required: Prepare the following financial statements of Baba Limited for publication in accordance with International Financial Reporting Standards (IFRS): Statement of profit or loss and other comprehensive Income for the year ended 31 December 2018 Statement of changes in Equity for the year to 31 December 2018 Statement of financial position as at 31 December 2018.
The following information has been extracted from the books of Baba Ltd for the year to 31 December 2018.
|
DR GH¢ |
CR GH¢ |
Sales
|
|
3,250,000 |
Purchases |
1,175,000 |
|
Administrative expenses |
425,000 |
|
Interest paid Share capital (ordinary shares of GH¢1 each) |
12,500 |
500,000 |
Dividend |
15,000 |
|
Cash at bank and in hand |
22,500 |
|
Income tax (remaining balance from previous year) Provision for doubtful debt |
25,000 |
225,000 |
Distribution costs |
600,000 |
|
Land at cost Buildings: At Cost |
275,000
250,000 |
|
|
|
120,000 |
Plant and machinery: |
|
|
At cost Accumulated depreciation (at 1 Jan 2018) |
312,500 |
187,500 |
|
|
675,000 |
10% Loan note Inventory (at 1 Jan 2018) |
375,000 |
200,000 |
Trade receivables and Payables |
1,820,000
|
150,000 |
|
5307500 |
5307500 |
Additional information
- Inventory cost at 31 December 2018 was valued at GH¢625,000 but this can be sold for GH¢750,000 with a related selling cost of GH¢112,500.
- The land was revalued to GH¢375,000 at the end of the year.
- Buildings are
depreciated on a straight-line basis (assuming no residual value) at 5% whiles Plant and machinery is depreciated using areducing Balance Method at 20% - The depreciation charges for the year are to be apportioned as follows: Cost of sales 30%; Administrative expenses 40%; Distribution costs 30%
- Income taxes for the year are estimated to be GH¢300,000.
- The year-end provision for doubtful debt is to be increased to GH¢250,000. Provision for doubtful debts is charged to Distribution Cost.
Required:
Prepare the following financial statements of Baba Limited for publication in accordance with International Financial Reporting Standards (IFRS):
- Statement of profit or loss and other comprehensive Income for the year ended 31 December 2018
- Statement of changes in Equity for the year to 31 December 2018
Statement of financial position as at 31 December 2018.
Step by step
Solved in 4 steps with 4 images