Extracted text: v) Inventory value at 31 December 2017 amounted to GHC1,840,000 vi) Rent recorded in the trial balance represents 15months rent paid to 31 March 2018 vii A provision of 10% of trade receivable is to be made vii) During the year Motor Vehicle costing GH€1,200,000 was disposed off. The vehicle had been in existence and depreciated for 3 years. Proceeds from the sale of the vehicle was GHCS00,000. This has not been accounted for in the books of Bob and Sons. ix) All Expenses are to be allocated evenly between Distribution Costs and Administrative Expenses Required: Prepare the following statements in accordance with International Accounting Standards: a)Statement of comprehensive income for Bob and Sons for the year ended 31 December 2017 b) Changes in Equity ) The Statement of financial position as at 31 December 2017 Preview 2 of 2
Extracted text: QUESTION ONE Bob and Sons prepares its financial statements to 31 December every year. At 31 December 2017, the company's trial balance was as follows: Cr GHC'000 Dr GHC'000 Sales 50,000 Purchases 42,156 Inventory 1/1/2017 Printing and Stationery 1,245 1,692 Rent and Rates 480 Travelling and Transport Repairs and Maintenance Other administrative expense 780 1,523 500 Land at cost 13,500 Building at cost Acc. Depreciation- Building 45,000 6,750 Motor Vehicle at cost 24,500 Acc. Depreciation- Motor Vehicle Equipment and Furniture Acc. Depreciation -Equipment & Furniture 19,600 12,450 4,980 Trade Receivables 9,450 Cash and Bank balance 9,524 Trade Payables Short term loan Share Capital Retained Earnings 18,450 12,500 15,000 35,520 TOTAL 162,800 162,800 The following additional information is relevant: i) Depreciation is to be provided as follows: Building - 3% per year on cost Motor Vehicle -20% per year on cost Equipment & Furniture - 10% per year on cost It is the policy of the company not to charge depreciation in the year of disposal. iii)The previous year depreciation for motor vehicle was over charged by GHC240. iv) Land was revalued later in the year for GHE15,000,000. No change was required to the value of the building. Preview 1 of 2