Question Tag: Statement of Changes in Equity

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  • 16 Marks

FR – Nov 2019 – L2 – Q1b – Presentation of Financial Statements (IAS 1)

Prepare financial statements for Uchena Nigeria Plc, including profit or loss, changes in equity, and financial position.

The Chief Accountant of Uchena Nigeria plc has just forwarded the trial balance of the company to you for review before the preparation of draft financial statements for the year ended December 31, 2018.

The trial balance is as follows:

Description Debit (N’m) Credit (N’m)
Ordinary share capital 43,200
Revenue 125,280
Staff cost 18,720
Leasehold building 21,600
Patent rights 4,320
Work-in-progress (Jan 1, 2018) 9,000
Accum. Depreciation on building (Jan 1, 2018) 4,320
Inventories of finished goods (Jan 1, 2018) 11,160
Consultancy fee 3,168
Directors’ salaries 25,920
Computer at cost (Hardware) 3,600
Accum. Depreciation on computer (Jan 1, 2018) 1,440
Retained earnings (Jan 1, 2018) 8,712
Dividend paid 9,000
Cash and bank 31,680
Trade receivables 30,240
Trade payables 6,624
Sundry expenses 21,168
Totals 189,576 189,576

Additional information:

  1. On January 1, 2018, buildings were revalued to N25,920 million. This has not been reflected in the accounts.
  2. Computer (hardware) is depreciated over five years. Buildings are now to be depreciated over 30 years.
  3. The patent rights relate to a computer software with a 3-year life span.
  4. An allowance for bad debts of 5% is to be created.
  5. Closing inventories of finished goods are valued at N12,960 million. Work-in-progress has increased to N10,080 million.
  6. There is an estimated liability for current tax of N8,640 million, which has not been recognized.

Required:

  1. Prepare a draft statement of profit or loss (analyzing expenses by nature) for the year ended December 31, 2018. (6 Marks)
  2. Prepare a statement of changes in equity for the year ended December 31, 2018. (4 Marks)
  3. Prepare a statement of financial position as at December 31, 2018. (6 Marks)

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  • 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.

The trial balance for United Nigeria Plc as at December 31, 2020 is given below:

Additional information:

  1. 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.
  2. Additional ordinary shares of 50,000,000 were issued and fully paid for at 80 kobo per share, which is yet to be recorded.
  3. 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.
  4. Allowances for trade receivables are to be increased to 15% per annum. Depreciation is charged on plant and equipment at 15% on reducing balance.
  5. 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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  • 40 Marks

FR – Mar/Jul 2020 – L2 – Q1 – Financial Statement Analysis of Dangoyaro Plc

Preparation and analysis of financial statements, cash flow, and equity statements of Dangoyaro Plc for the year ended September 30, 2019, using IAS standards.

Dangoyaro Plc is a manufacturing company, and the summarized financial statements for the year ended September 30, 2019, and the comparative figures for 2018 are as follows:

Statement of Financial Position as at September 30

Equity and liabilities
Equity

The following information was obtained from the chairman’s statement in the annual report presented at the Annual General Meeting (AGM) held on December 22, 2019, and in the notes to the financial statements.

(i) Market condition during the year ended September 30, 2019, proved very challenging due largely to difficulties in the global economy as a result of the recession, which led to a decline in the share price and property values.

(ii) Dangoyaro Plc has not been immune from these effects and our properties have suffered impairment losses of ₦125 million in the year. The excess of these losses over previous surpluses has led to a charge to cost of sales of ₦37.5 million in addition to the normal depreciation charge.

(iii) There is no addition to or disposal of non-current assets during the year.

(iv) In response to the downturn, the company has made a number of employees redundant, incurring severance costs of ₦32.5 million (included in cost of sales), undertaken cost savings in advertising and other administrative expenses.

(v) The difficulty in the credit market has meant that the finance cost of our fixed interest bank loan has increased from ₦12.5 million to ₦15 million. In order to improve cash flows, the company made a rights issue during the year and reduced the dividend per share by 50%.

(vi) Despite the above events and the associated costs, the board of directors of Dangoyaro Plc believes the company’s performance has been quite resilient in these difficult times.

You are required to prepare:

a. An adjusted statement of profit or loss for the year ended September 30, 2019 (without taking into consideration information in the chairman’s statement and notes to the financial statements). (5 Marks)

b. Statement of changes in equity for the year ended September 30, 2019. (8 Marks)

c. Statement of cash flows for the year ended September 30, 2019, using the indirect method in accordance with provisions of IAS 7. (12 Marks)

d. Analyse and discuss the financial performance and position of Dangoyaro Plc as shown by the above financial statements as at September 30, 2019, using the following financial ratios:

i. Gross profit margin
ii. Net profit margin
iii. Return on capital employed (CE = ordinary shares plus reserves)
iv. Asset turnover
v. Current ratio
vi. Quick ratio
vii. Gearing ratio
viii. Receivables period
ix. Inventory period
x. Payables period

(15 Marks)
(Total 40 Marks)

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  • 20 Marks

FR – July 2023 – L2 – Q3 – Preparation of Financial Statements for Beposo Ltd

Preparation of financial statements (profit or loss, changes in equity, and financial position) for Beposo Ltd for the year ended 31 December 2021.

Beposo Ltd is an agro-processing company, whose head office is in the Greater Accra region of Ghana. The trial balance of the company for the year ended 31 December 2021 is as follows:

Additional Information:

i) Included in the revenue figure is sales made on special arrangement, payable by customers in two years’ time at an amount of GH¢16.8 million. The cash price of the sales at the date of the sales (i.e. 1 January 2021) is estimated at GH¢15 million, and the effective interest rate of the arrangement has been computed as 5.83% per annum.

ii) Non-current assets consist of the following classes of assets:

The company revalues its buildings periodically to ensure that the carrying value reflects their fair market value. On 31 December 2020, the buildings were revalued at GH¢198 million, of which GH¢80 million was attributed to land. The revaluation surplus shown in the trial balance represents the increase in value recorded during this revaluation. All buildings were completed and ready for use on 1 January 2011. The company’s buildings serve as administrative offices and production centers, and they have an estimated useful life of 50 years.

In 2021, the company relocated from one of its administrative offices and sold the building on 1 April 2021 for GH¢27.6 million. The revalued amount and revaluation surplus for this building as of 31 December 2020 were GH¢25 million (with GH¢5 million for the land) and GH¢8 million, respectively. On 31 December 2021, the remaining land and buildings were revalued at GH¢169.35 million, with GH¢85 million attributed to the land. The company’s policy is to recognize revaluation surplus only upon derecognition of the non-current asset.

The sale of the building and the 2021 revaluation of the remaining buildings have not yet been recorded in the company’s books. The payment for the sale of the building was received in the first week of January 2022. There were no other changes to the value of property, plant, and equipment during the year ended 31 December 2021.

Depreciation for 2021 has not been accounted for in the trial balance. The company charges depreciation to cost of sales. Motor vehicles, machinery, and equipment are depreciated over five years.

In lieu of a cash dividend, the company issued bonus shares on 1 January 2021 at a ratio of one new share for every ten existing shares, priced at GH¢1 per share. The issuance was subject to an 8% withholding tax, which has already been paid by the company and is included in administrative expenses. The bonus shares, which are in respect of the year ended 31 December 2020, have not yet been recorded.

After 31 December 2021, the Board of Directors proposed a dividend of GH¢0.80 per share in respect of the year ended 31 December 2021. The dividend has not yet been approved by shareholders.

The provision for tax in the trial balance reflects the under or over provision of tax for the year ended 31 December 2020, based on the difference between the tax estimated for the year and the actual liability determined after a tax audit. The current tax liability for 2021 is estimated at GH¢16.7 million. Taxable temporary differences as at 31 December 2021, arising from discrepancies between the carrying amounts of assets and liabilities and their tax bases, amount to GH¢60 million. The applicable corporation tax rate is 25%.

Required:

Prepare the following financial statements for Beposo Ltd for the year ended 31 December 2021:
i) Statement of profit or loss and other comprehensive income
ii) Statement of changes in equity
iii) Statement of financial position as at that date.
(Total: 20 marks)

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  • 1 Marks

FA – May 2024 – L1 – SA – Q19 – Financial Statements Preparation

Identifies the role of the statement of changes in equity in financial reporting.

What role does the statement of changes in equity play in a company’s financial reporting and decision-making?

A. It helps in assessing a company’s non-current assets and depreciation methods
B. It provides a detailed breakdown of a company’s cash flows from operating, investing, and financing activities
C. It presents a summary of a company’s equity transactions, aiding stakeholders in understanding financial performance and ownership changes over time
D. It shows the company’s income and expenses, enabling stakeholders to evaluate profitability and cash generation
E. It outlines a company’s long-term debt obligations and interest expense, assisting stakeholders in assessing capital structure and financial stability

 

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  • 20 Marks

FR – Nov 2016 – L2 – Q3 – Preparation of Financial Statements

Prepare the financial statements of Kwadaso Ltd, including profit or loss, changes in equity, and financial position for the year ended 30 September 2015.

The following is the trial balance of Kwadaso Ltd, a trading company, as at 30 September 2015:

Additional Information:

  1. On 31 March 2015, the company made a bonus issue from retained earnings of one new share for every four shares in issue at GH¢10.00 each. This transaction is yet to be recorded in the books. The company paid ordinary dividends of GH¢2.2 per share on 31 January 2015 and GH¢2.6 per share on 30 June 2015. The dividend payments are included in administrative expenses in the trial balance.
  2. Provision is to be made for a full year’s interest on the Loan notes.
  3. The finance charge relating to the preference shares is equal to the dividend payable.
  4. Non-current assets:
    • Depreciation of Property, Plant, and Equipment is to be provided on the following bases:
      • Plant and equipment – 10% on cost
      • Computer equipment – 25% on cost
      • Motor vehicles – 20% on reducing balance
    • No depreciation has yet been charged on any non-current asset for the year ended 30 September 2015.
    • Kwadaso revalues its buildings at the end of each accounting year. At 30 September 2015, the relevant value to be incorporated into the financial statements is GH¢14,100,000. The building’s remaining life at the beginning of the current year (1 October 2014) was 25 years. Kwadaso does not make an annual transfer from the revaluation reserve to retained earnings in respect of the realisation of the revaluation surplus. Ignore deferred tax on the revaluation surplus.
  5. The available-for-sale investments held at 30 September 2015 had a fair value of GH¢8,400,000. There were no acquisitions or disposals of these investments during the year.
  6. In February 2015, Kwadaso’s internal audit unit discovered a fraud committed by the company’s credit manager who did not return from a foreign business trip. The outcome of the fraud is that GH¢500,000 of the company’s trade receivables have been stolen by the credit manager and are not recoverable. Of this amount, GH¢200,000 relates to the year ended 30 September 2014 and the remainder to the current year. Kwadaso is not insured against this fraud.
  7. Corporate income tax payable estimated on the profit for the year is GH¢3,500,000. An amount of GH¢1,200,000 is to be transferred to the deferred taxation account.

Required:
Prepare the following financial statements of Kwadaso Ltd for publication in accordance with International Financial Reporting Standards (IFRS):

a) Statement of profit or loss and other comprehensive income for the year ended 30 September 2015.

b) Statement of changes in equity for the year ended 30 September 2015.

c) Statement of financial position as at 30 September 2015.

d) Show clearly all relevant workings.

(Note: Accounting policy notes are not required)

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  • 15 Marks

CR – Nov 2017 – L3 – Q4 – Presentation of financial statements

Prepare a statement of changes in equity for Ahomka Ltd for the years ended 30 April 2016 and 2017.

Ahomka Ltd is a public listed manufacturing company. Its summarised financial statements for the year ended 30 April 2017 (and 2016 comparatives) are as follows:

The following additional information is available:
i) There were no additions to, or disposals of, non-current assets during the year.
ii) In order to help cash flows, the company made a rights issue of shares during the year ending 30 April 2017, all of which ranked for dividend. No shares were issued during the year ended 30 April 2016.
iii) The dividend per share has been reduced by 50% for the year ended 30 April 2017.

Required:
a) Prepare a statement of changes in equity for years ended 30 April 2016 and 2017 for Ahomka Ltd as the above information permits.

b) Analyze and discuss the financial performance and financial position of Ahomka Ltd as portrayed in the financial statements and in the additional information provided. Your analysis should be supported by relevant ratios.

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  • 16 Marks

FR – Nov 2019 – L2 – Q1b – Presentation of Financial Statements (IAS 1)

Prepare financial statements for Uchena Nigeria Plc, including profit or loss, changes in equity, and financial position.

The Chief Accountant of Uchena Nigeria plc has just forwarded the trial balance of the company to you for review before the preparation of draft financial statements for the year ended December 31, 2018.

The trial balance is as follows:

Description Debit (N’m) Credit (N’m)
Ordinary share capital 43,200
Revenue 125,280
Staff cost 18,720
Leasehold building 21,600
Patent rights 4,320
Work-in-progress (Jan 1, 2018) 9,000
Accum. Depreciation on building (Jan 1, 2018) 4,320
Inventories of finished goods (Jan 1, 2018) 11,160
Consultancy fee 3,168
Directors’ salaries 25,920
Computer at cost (Hardware) 3,600
Accum. Depreciation on computer (Jan 1, 2018) 1,440
Retained earnings (Jan 1, 2018) 8,712
Dividend paid 9,000
Cash and bank 31,680
Trade receivables 30,240
Trade payables 6,624
Sundry expenses 21,168
Totals 189,576 189,576

Additional information:

  1. On January 1, 2018, buildings were revalued to N25,920 million. This has not been reflected in the accounts.
  2. Computer (hardware) is depreciated over five years. Buildings are now to be depreciated over 30 years.
  3. The patent rights relate to a computer software with a 3-year life span.
  4. An allowance for bad debts of 5% is to be created.
  5. Closing inventories of finished goods are valued at N12,960 million. Work-in-progress has increased to N10,080 million.
  6. There is an estimated liability for current tax of N8,640 million, which has not been recognized.

Required:

  1. Prepare a draft statement of profit or loss (analyzing expenses by nature) for the year ended December 31, 2018. (6 Marks)
  2. Prepare a statement of changes in equity for the year ended December 31, 2018. (4 Marks)
  3. Prepare a statement of financial position as at December 31, 2018. (6 Marks)

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  • 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.

The trial balance for United Nigeria Plc as at December 31, 2020 is given below:

Additional information:

  1. 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.
  2. Additional ordinary shares of 50,000,000 were issued and fully paid for at 80 kobo per share, which is yet to be recorded.
  3. 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.
  4. Allowances for trade receivables are to be increased to 15% per annum. Depreciation is charged on plant and equipment at 15% on reducing balance.
  5. 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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  • 40 Marks

FR – Mar/Jul 2020 – L2 – Q1 – Financial Statement Analysis of Dangoyaro Plc

Preparation and analysis of financial statements, cash flow, and equity statements of Dangoyaro Plc for the year ended September 30, 2019, using IAS standards.

Dangoyaro Plc is a manufacturing company, and the summarized financial statements for the year ended September 30, 2019, and the comparative figures for 2018 are as follows:

Statement of Financial Position as at September 30

Equity and liabilities
Equity

The following information was obtained from the chairman’s statement in the annual report presented at the Annual General Meeting (AGM) held on December 22, 2019, and in the notes to the financial statements.

(i) Market condition during the year ended September 30, 2019, proved very challenging due largely to difficulties in the global economy as a result of the recession, which led to a decline in the share price and property values.

(ii) Dangoyaro Plc has not been immune from these effects and our properties have suffered impairment losses of ₦125 million in the year. The excess of these losses over previous surpluses has led to a charge to cost of sales of ₦37.5 million in addition to the normal depreciation charge.

(iii) There is no addition to or disposal of non-current assets during the year.

(iv) In response to the downturn, the company has made a number of employees redundant, incurring severance costs of ₦32.5 million (included in cost of sales), undertaken cost savings in advertising and other administrative expenses.

(v) The difficulty in the credit market has meant that the finance cost of our fixed interest bank loan has increased from ₦12.5 million to ₦15 million. In order to improve cash flows, the company made a rights issue during the year and reduced the dividend per share by 50%.

(vi) Despite the above events and the associated costs, the board of directors of Dangoyaro Plc believes the company’s performance has been quite resilient in these difficult times.

You are required to prepare:

a. An adjusted statement of profit or loss for the year ended September 30, 2019 (without taking into consideration information in the chairman’s statement and notes to the financial statements). (5 Marks)

b. Statement of changes in equity for the year ended September 30, 2019. (8 Marks)

c. Statement of cash flows for the year ended September 30, 2019, using the indirect method in accordance with provisions of IAS 7. (12 Marks)

d. Analyse and discuss the financial performance and position of Dangoyaro Plc as shown by the above financial statements as at September 30, 2019, using the following financial ratios:

i. Gross profit margin
ii. Net profit margin
iii. Return on capital employed (CE = ordinary shares plus reserves)
iv. Asset turnover
v. Current ratio
vi. Quick ratio
vii. Gearing ratio
viii. Receivables period
ix. Inventory period
x. Payables period

(15 Marks)
(Total 40 Marks)

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  • 20 Marks

FR – July 2023 – L2 – Q3 – Preparation of Financial Statements for Beposo Ltd

Preparation of financial statements (profit or loss, changes in equity, and financial position) for Beposo Ltd for the year ended 31 December 2021.

Beposo Ltd is an agro-processing company, whose head office is in the Greater Accra region of Ghana. The trial balance of the company for the year ended 31 December 2021 is as follows:

Additional Information:

i) Included in the revenue figure is sales made on special arrangement, payable by customers in two years’ time at an amount of GH¢16.8 million. The cash price of the sales at the date of the sales (i.e. 1 January 2021) is estimated at GH¢15 million, and the effective interest rate of the arrangement has been computed as 5.83% per annum.

ii) Non-current assets consist of the following classes of assets:

The company revalues its buildings periodically to ensure that the carrying value reflects their fair market value. On 31 December 2020, the buildings were revalued at GH¢198 million, of which GH¢80 million was attributed to land. The revaluation surplus shown in the trial balance represents the increase in value recorded during this revaluation. All buildings were completed and ready for use on 1 January 2011. The company’s buildings serve as administrative offices and production centers, and they have an estimated useful life of 50 years.

In 2021, the company relocated from one of its administrative offices and sold the building on 1 April 2021 for GH¢27.6 million. The revalued amount and revaluation surplus for this building as of 31 December 2020 were GH¢25 million (with GH¢5 million for the land) and GH¢8 million, respectively. On 31 December 2021, the remaining land and buildings were revalued at GH¢169.35 million, with GH¢85 million attributed to the land. The company’s policy is to recognize revaluation surplus only upon derecognition of the non-current asset.

The sale of the building and the 2021 revaluation of the remaining buildings have not yet been recorded in the company’s books. The payment for the sale of the building was received in the first week of January 2022. There were no other changes to the value of property, plant, and equipment during the year ended 31 December 2021.

Depreciation for 2021 has not been accounted for in the trial balance. The company charges depreciation to cost of sales. Motor vehicles, machinery, and equipment are depreciated over five years.

In lieu of a cash dividend, the company issued bonus shares on 1 January 2021 at a ratio of one new share for every ten existing shares, priced at GH¢1 per share. The issuance was subject to an 8% withholding tax, which has already been paid by the company and is included in administrative expenses. The bonus shares, which are in respect of the year ended 31 December 2020, have not yet been recorded.

After 31 December 2021, the Board of Directors proposed a dividend of GH¢0.80 per share in respect of the year ended 31 December 2021. The dividend has not yet been approved by shareholders.

The provision for tax in the trial balance reflects the under or over provision of tax for the year ended 31 December 2020, based on the difference between the tax estimated for the year and the actual liability determined after a tax audit. The current tax liability for 2021 is estimated at GH¢16.7 million. Taxable temporary differences as at 31 December 2021, arising from discrepancies between the carrying amounts of assets and liabilities and their tax bases, amount to GH¢60 million. The applicable corporation tax rate is 25%.

Required:

Prepare the following financial statements for Beposo Ltd for the year ended 31 December 2021:
i) Statement of profit or loss and other comprehensive income
ii) Statement of changes in equity
iii) Statement of financial position as at that date.
(Total: 20 marks)

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  • 1 Marks

FA – May 2024 – L1 – SA – Q19 – Financial Statements Preparation

Identifies the role of the statement of changes in equity in financial reporting.

What role does the statement of changes in equity play in a company’s financial reporting and decision-making?

A. It helps in assessing a company’s non-current assets and depreciation methods
B. It provides a detailed breakdown of a company’s cash flows from operating, investing, and financing activities
C. It presents a summary of a company’s equity transactions, aiding stakeholders in understanding financial performance and ownership changes over time
D. It shows the company’s income and expenses, enabling stakeholders to evaluate profitability and cash generation
E. It outlines a company’s long-term debt obligations and interest expense, assisting stakeholders in assessing capital structure and financial stability

 

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  • 20 Marks

FR – Nov 2016 – L2 – Q3 – Preparation of Financial Statements

Prepare the financial statements of Kwadaso Ltd, including profit or loss, changes in equity, and financial position for the year ended 30 September 2015.

The following is the trial balance of Kwadaso Ltd, a trading company, as at 30 September 2015:

Additional Information:

  1. On 31 March 2015, the company made a bonus issue from retained earnings of one new share for every four shares in issue at GH¢10.00 each. This transaction is yet to be recorded in the books. The company paid ordinary dividends of GH¢2.2 per share on 31 January 2015 and GH¢2.6 per share on 30 June 2015. The dividend payments are included in administrative expenses in the trial balance.
  2. Provision is to be made for a full year’s interest on the Loan notes.
  3. The finance charge relating to the preference shares is equal to the dividend payable.
  4. Non-current assets:
    • Depreciation of Property, Plant, and Equipment is to be provided on the following bases:
      • Plant and equipment – 10% on cost
      • Computer equipment – 25% on cost
      • Motor vehicles – 20% on reducing balance
    • No depreciation has yet been charged on any non-current asset for the year ended 30 September 2015.
    • Kwadaso revalues its buildings at the end of each accounting year. At 30 September 2015, the relevant value to be incorporated into the financial statements is GH¢14,100,000. The building’s remaining life at the beginning of the current year (1 October 2014) was 25 years. Kwadaso does not make an annual transfer from the revaluation reserve to retained earnings in respect of the realisation of the revaluation surplus. Ignore deferred tax on the revaluation surplus.
  5. The available-for-sale investments held at 30 September 2015 had a fair value of GH¢8,400,000. There were no acquisitions or disposals of these investments during the year.
  6. In February 2015, Kwadaso’s internal audit unit discovered a fraud committed by the company’s credit manager who did not return from a foreign business trip. The outcome of the fraud is that GH¢500,000 of the company’s trade receivables have been stolen by the credit manager and are not recoverable. Of this amount, GH¢200,000 relates to the year ended 30 September 2014 and the remainder to the current year. Kwadaso is not insured against this fraud.
  7. Corporate income tax payable estimated on the profit for the year is GH¢3,500,000. An amount of GH¢1,200,000 is to be transferred to the deferred taxation account.

Required:
Prepare the following financial statements of Kwadaso Ltd for publication in accordance with International Financial Reporting Standards (IFRS):

a) Statement of profit or loss and other comprehensive income for the year ended 30 September 2015.

b) Statement of changes in equity for the year ended 30 September 2015.

c) Statement of financial position as at 30 September 2015.

d) Show clearly all relevant workings.

(Note: Accounting policy notes are not required)

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  • 15 Marks

CR – Nov 2017 – L3 – Q4 – Presentation of financial statements

Prepare a statement of changes in equity for Ahomka Ltd for the years ended 30 April 2016 and 2017.

Ahomka Ltd is a public listed manufacturing company. Its summarised financial statements for the year ended 30 April 2017 (and 2016 comparatives) are as follows:

The following additional information is available:
i) There were no additions to, or disposals of, non-current assets during the year.
ii) In order to help cash flows, the company made a rights issue of shares during the year ending 30 April 2017, all of which ranked for dividend. No shares were issued during the year ended 30 April 2016.
iii) The dividend per share has been reduced by 50% for the year ended 30 April 2017.

Required:
a) Prepare a statement of changes in equity for years ended 30 April 2016 and 2017 for Ahomka Ltd as the above information permits.

b) Analyze and discuss the financial performance and financial position of Ahomka Ltd as portrayed in the financial statements and in the additional information provided. Your analysis should be supported by relevant ratios.

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