The trial balance of Beta Limited as at 31st December, 2019 is as follows: Debit Credit GH¢ GH¢ Sales and Purchases 20,000 50,000 Inventory 8,000 Distribution costs 8,000 Administration expenses 15,550 Trade Receivables and Payables 12,400 20,000 Cash and bank 8,100 Ordinary shares (GH¢0.50) 52,000 Revaluation reserve 8,000 10% Redeemable preference shares (GH¢1) 9,000 10% Loan Notes 8,000 Property, Plant and Equipment 75,000 Investment property 10,000 Rental income from investment property 1,000 Retained profits at 1st January, 2019 3,000 Loan note interest 400 Preference dividend 450 Interim ordinary dividend 1,600 Corporate Tax 500 Suspense 8,000 159,500 159,500 The following is to be taken into account: The inventory at cost on 31st December, 2019 was GH¢14,500and the net realizable value was GH¢12,000. The Property, Plant and Equipment include a building whose net book value is currently GH¢5,000 is to be revalued to GH¢9,000. The balance on the corporation tax account represents an overprovision of tax for the previous year. Tax for the current year is estimated at GH¢3,000. The directors have decided to make an allowance for doubtful debts of 2% of trade receivables. This amount should be charged to administrative Depreciation charges for the year ended 31st December 2019 amounted to GH¢800. This figure should be included in the administrative The investment property was acquired in January, 2019. The rental income from the investment property GH¢1,000 relates to the two-year period ending 31st December, The company adopts fair value model in subsequent measurement of the investment property and fair value assessment at 31st December, 2019 puts the valuation at GH¢15,000. The suspense account represents the corresponding credit for cash received for a fully subscribed issue of ordinary shares made on 30th December, 2019. The terms of the share issue was 4,000 new ordinary shares were issued at GH¢2.00 Required: In compliance with the Companies’ Code provisions and in conformity with relevant International Financial Reporting Standards, prepare for publication; The statement of profit or loss and other comprehensive income for the year ended 31st December, 2019; statement of changes in equity for the year ended 31st December, 2019; and statement of financial position as at 31st December, 2019

The trial balance of Beta Limited as at 31st December, 2019 is as follows: Debit Credit GH¢ GH¢ Sales and Purchases 20,000 50,000 Inventory 8,000 Distribution costs 8,000 Administration expenses 15,550 Trade Receivables and Payables 12,400 20,000 Cash and bank 8,100 Ordinary shares (GH¢0.50) 52,000 Revaluation reserve 8,000 10% Redeemable preference shares (GH¢1) 9,000 10% Loan Notes 8,000 Property, Plant and Equipment 75,000 Investment property 10,000 Rental income from investment property 1,000 Retained profits at 1st January, 2019 3,000 Loan note interest 400 Preference dividend 450 Interim ordinary dividend 1,600 Corporate Tax 500 Suspense 8,000 159,500 159,500 The following is to be taken into account: The inventory at cost on 31st December, 2019 was GH¢14,500and the net realizable value was GH¢12,000. The Property, Plant and Equipment include a building whose net book value is currently GH¢5,000 is to be revalued to GH¢9,000. The balance on the corporation tax account represents an overprovision of tax for the previous year. Tax for the current year is estimated at GH¢3,000. The directors have decided to make an allowance for doubtful debts of 2% of trade receivables. This amount should be charged to administrative Depreciation charges for the year ended 31st December 2019 amounted to GH¢800. This figure should be included in the administrative The investment property was acquired in January, 2019. The rental income from the investment property GH¢1,000 relates to the two-year period ending 31st December, The company adopts fair value model in subsequent measurement of the investment property and fair value assessment at 31st December, 2019 puts the valuation at GH¢15,000. The suspense account represents the corresponding credit for cash received for a fully subscribed issue of ordinary shares made on 30th December, 2019. The terms of the share issue was 4,000 new ordinary shares were issued at GH¢2.00 Required: In compliance with the Companies’ Code provisions and in conformity with relevant International Financial Reporting Standards, prepare for publication; The statement of profit or loss and other comprehensive income for the year ended 31st December, 2019; statement of changes in equity for the year ended 31st December, 2019; and statement of financial position as at 31st December, 2019

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The trial balance of Beta Limited as at 31^st December, 2019 is as follows:

	Debit	Credit
	GH¢	GH¢
Sales and Purchases	20,000	50,000
Inventory	8,000
Distribution costs	8,000
Administration expenses	15,550
Trade Receivables and Payables	12,400	20,000
Cash and bank	8,100
Ordinary shares (GH¢0.50)		52,000
Revaluation reserve		8,000
10% Redeemable preference shares (GH¢1)		9,000
10% Loan Notes		8,000
Property, Plant and Equipment	75,000
Investment property	10,000
Rental income from investment property		1,000
Retained profits at 1^st January, 2019		3,000
Loan note interest	400
Preference dividend	450
Interim ordinary dividend	1,600
Corporate Tax		500
Suspense		8,000
	159,500	159,500
The following is to be taken into account:

The inventory at cost on 31^st December, 2019 was GH¢14,500and the net realizable value was GH¢12,000.
The Property, Plant and Equipment include a building whose net book value is currently GH¢5,000 is to be revalued to GH¢9,000.
The balance on the corporation tax account represents an overprovision of tax for the previous year. Tax for the current year is estimated at GH¢3,000.
The directors have decided to make an allowance for doubtful debts of 2% of trade receivables. This amount should be charged to administrative
Depreciation charges for the year ended 31^st December 2019 amounted to GH¢800. This figure should be included in the administrative
The investment property was acquired in January, 2019. The rental income from the investment property GH¢1,000 relates to the two-year period ending 31^st December, The company adopts fair value model in subsequent measurement of the investment property and fair value assessment at 31^st December, 2019 puts the valuation at GH¢15,000.
The suspense account represents the corresponding credit for cash received for a fully subscribed issue of ordinary shares made on 30^th December, 2019. The terms of the share issue was 4,000 new ordinary shares were issued at GH¢2.00

Required:

In compliance with the Companies’ Code provisions and in conformity with relevant International Financial Reporting Standards, prepare for publication;

The statement of profit or loss and other comprehensive income for the year ended 31^st December, 2019; statement of changes in equity for the year ended 31^st December, 2019; and statement of financial position as at 31^st December, 2019.

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