ASSIGNMENT # ONE $(1)2024$

$14.$ The following trial balance relates to Bonilinda Ltd as at $31$ December $2019$:

General reserve

Land at valuation

Buildings: $-$at cost

depreciation to $1$ January $2019$

Plant and machinery: $-$ at cost

depreciation to $1$ January $2019$

Inventory at $1$ January $2019$

Receivables current assers

Cash in hand

Payables

Bank

Administration expenses

Selling and distribution expenses

Ordinary dividends paid

Loan note interest paid

Returns inwards

Sales

Purchases

Carriage inwards

Carriage outwards

Returns outwards

Discounts received

Retained earnings at $1$ January $2019$

$10\%$ Preference shares, K$1$ each $-$

Suspense

Share premium

Revaluation reserve as at $1$ Jan. $2019$

Ordinary shares of K$1$ each

$12\%$ Loan notes

$\backslash$table$[[\backslash$table$[[$Dr$],[$K$\text{'}000]],\backslash$table$[[$Cr$],[$K$\text{'}000],[100]]],[4,950,],[3,500,200],[2,200,300],[2,100,],[8,750,],[4,620,3,180],[\backslash$table$[[$Ccarrend$],[$kasecfs$]],900],[2,640,],[2,920,],[350,],[150,],[4,000,29,920],[20,450,],[150,],[100,],[,1,340],[,1,690],[,1,900],[-,1,000],[,1,500],[w^2,500],[$in$,350],[6,11,500],[65,2,500]]$

$q,$

$56,880$

$56,880$

$56,880$

The following additional information is available at $31$ December $2019$:

$(1)$ One $(1)$ million new ordinary shares were issued for K$1\mathrm{.}5$ per share on $1$ October $2019.$ The proceeds have been left in a suspense account. The company proposed to pay a final ordinary dividend of K$666,000$ for the year.

$(2)$ At $31$ December $2019,$ prepaid administration expenses were K$120,000$ and accrued selling and distribution expenses were K$170,000.$

$2$

ASSIGNMENT # ONE $(1)2024$

$(3)$ Bonilinda uses revaluation model as allowed by IAS $16$ Property, Plant and equipment. The independent specialists in land valuation based in Kitwe, have advised that the land should be revalued upward by K$50,000.$

$(4)$ Depreciation is to be provided as follows:

i$.$ Buildings at $4\%$ per annum on their original cost.

ii$.$ Plant and machinery at $10\%$ per annum on their carrying amount.

All depreciation expense must be charged as part of administration expenses

$(5)$ The charge for corporation tax of $K80,000$ is to be provided for the year.

$(6)$ The $12\%$ loan note were issued on $1$ of July $2019.$

$(7)$ A customer ceased trading owing the company K$280,000.$ The debt is not expected to be recovered and an adjustment is yet to be made. Further, an allowance for receivables of $K10,000,$ is to be created.

$(8)$ Inventory at the close of business has been valued at $K1,940,000.$

$(9)$ The preference shares are redeemable preference shares and preference dividends for the year, have not yet been accounted for.

$(10)$ Directors approved to transfer $K200,000$ from retained to general reserves. This transaction is yet to be accounted for.

$(11)$ It was discovered that credit sales invoices totalling to $K1,000,000$ for goods delivered to customers on $22$ December $2019$ had by mistake been dated $2$ January $2020$ and thus excluded from the sales for the year and from account receivables at the year end.

$(12)$ on $31$ December $2019,$ Bonilinda Ltd made a bonus issue of five hundred thousand $(500000)$ shares. The bonus issue was correctly recorded and the company utilised the share premium account.

Required:

Prepare the following for Bonilinda Ltd:

$($a$)$ Statement of profit or loss and other comprehensive income for the year ended $31$ December $2019.$

$(10$ marks$)$

$($b$)$ Statement of changes in equity for the year ended $31$ December $2019.(5$ marks$)$

$($c$)$ Statement of financial position as at $31$ December $2019.,10$ marks$)$

$(15)$ Explain why the conceptual framework does not prescribe any recognition criteria for equity.

$(2$ marks$)$

$(16)$ Distinguish between public sector entities and private sector entities. $(3$ marks$)$

$(17)$ Discuss the argument that financial statements prepared on the basis of accruals

provide more useful information than those prepared on a cash basis. $(4$ marks$)$

$(12)$ Discuss three $(3)$ advantages and two $(2)$ disadvantages of international