QUESTION $1(37$ marks$)$

You are the Financial Accountant of Demtex Ltd$,$ a company with a $31$ December

financial year$-$end.

You are in the process of preparing Demtex Ltd$$s annual financial statements for the

$31$ December $2024$ financial year. The following is Demtex Ltd$$s trial balance for $31$

December $2024$:

Account

Debit

Rand

Credit

Rand

Share capital $1000000$

Retained earnings $(1$ January $2024)2906078$

Revaluation surplus $876000$

Share$-$based payment reserve $1255000$

Long$-$term borrowings $5785000$

Current portion long$-$term borrowings $126500$

Deferred taxation $55265$

Revenue $12536524$

Interest income $112536$

Trade and other payables $236567$

Taxation payable $52478$

Bank overdraft $10254$

Property, plant and equipment $-$ cost $9788255$

Property, plant and equipment $$ accumulated

depreciation

$1255456$

Inventory $2587256$

Trade and other receivables $788654$

Cost of sales $9554663$

Operating expenses $1996467$

Interest expense $236587$

Income tax expense $255776$

Dividends paid $1000000$

$2620765826207658$

$3$ HFAC$231-1-$Jan$-$Jun$2025-$FA$1-$CP$-$V$4-25022025$

Additional information:

$$ The operating expenses consist of the following:

Rand

Depreciation $324555$

Loss on sale of equipment $85247$

Distribution costs $326545$

Administrative expenses $234665$

Salaries and wages $1025455$

$1996467$

$$ The revaluation surplus relates to the revaluation of one of Demtex Ltd$$s properties

which was done in the current financial year. The revaluation surplus before tax

amounted to R$1200000.$ The deferred tax relating to the revaluation surplus

amounted to R$324000.$

$$ Demtex Ltd classifies expenses by function in a single Statement of Profit or Loss

and Other Comprehensive Income.

$$ All tax on items of other comprehensive income should be presented in terms of

the requirements of IAS$1\mathrm{.}91($b$).$

$$ Assume all amounts to be material.

REQUIRED:

$1\mathrm{.}1$ Prepare the Statement of Profit or Loss and Other Comprehensive Income of

Demtex Ltd for the year ended $31$ December $2024.$ Include only the Profit

before tax note disclosure. Comparative figures are not required.

$(13$ marks$)$

Communication skill: Presentation $(1$ mark$)$

$1\mathrm{.}2$ Prepare the Statement of Financial Position of Demtex Ltd as at $31$ December

$2024.$ Note disclosure and comparative figures are not required.

$(22$ marks$)$

Communication skill: Presentation $(1$ mark$)$