- 25 Marks
FR – Nov 2021 – L2 – Q1a – Presentation of Financial Statements (IAS 1)
Prepare the financial statements of United Nigeria PLC including comprehensive income, changes in equity, and financial position as of December 31, 2020.
Question
The trial balance for United Nigeria Plc as at December 31, 2020 is given below:
Additional information:
- Inventories at the end of the year were N120,000,000. Included in the closing inventories was a damaged item with a cost of N30,000,000, which has a net realizable value of N18,000,000.
- Additional ordinary shares of 50,000,000 were issued and fully paid for at 80 kobo per share, which is yet to be recorded.
- Interest on 10% loan notes is outstanding and dividend on 12% preference shares were paid on December 31, 2020. Ordinary shareholders were also paid a dividend of 5 kobo per share.
- Allowances for trade receivables are to be increased to 15% per annum. Depreciation is charged on plant and equipment at 15% on reducing balance.
- N5,000,000 administrative expenses were outstanding, and N25,000,000 company income tax is estimated for the year. Depreciation is charged to administrative expenses.
You are required to prepare the following:
a. (i) Statement of Comprehensive Income for United Nigeria Plc for the year ended December 31, 2020. (10 Marks)
(ii) Statement of Changes in Equity for the year ended December 31, 2020. (5 Marks)
(iii) Statement of Financial Position as at December 31, 2020. (10 Marks)
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