RUN Estates Development Limited was formed in Mowe, Ogun State in 2006 and purchased freehold land at Pakuro for the purpose of creating a highly developed holiday center and retirement estate. The area of land purchased consists of 4,000 plots from which a block of 20 plots was designed as a sports and entertainment arena, whilst the remaining land was offered for sale at N1,500 a plot for luxury bungalow development. As of 2009 April, the position of the company was as below.
N’000
The authorized share capital of 4,000
Issued and Fully Paid Shares
9% Redeemable Preference Shares of N1.00 each 450
Ordinary Shares 2,700
Un-appropriated Profit b/d 960
4,110
7% Debenture 1,800
Debenture Redemption Fund 690
6,600

Non-Current Assets N’ 000 N’ 000 N’ 000
Entertainment Arena including Land &
Fitting at Cost 4,533
Less: depreciation 75 4,458
Debenture redemption Fund Investment
At Cost (MV: N750,000) 690
5,148
Current Assets
Freehold Land (2 plots unsold at cost) 1,200
Arena – Inventory 75
Arena – Receivables 13
Bank 452
1,740
Less: Current Liabilities
Trade Payables 18
Proposed Dividend (Ordinary Shares) 270 (288) 1,452
6,600
The following transactions took place in the year to 30th April. 2010
In July 2007 to be effective from May 2009, the company sold the entertainment Arena to Progress Ltd for N300,000 together with Arena inventory and receivables at the book value and cash settlement made on 30/9/2009
The Preference shares were redeemed on 30th June 2009 within the terms of the original issue at 105 in lieu of accrued interest. The premium on redemption is to be written off to capital reserve.
The proposed ordinary dividend was paid on July 1, 2009.
On October 31, 2009, the 7% debentures were redeemed at 104 together with 6 months of accrued interest. The premium on redemption is to be written off to capital reserve. The Debenture Redemption Fund had been created out of profits.
On November 1, 2009, the company made a bonus share issue to the ordinary shareholders of 1 for every 3 ordinary shares held on that date. The capital reserves arising from the realization of fixed assets were created for this purpose.
During the course of the year, 400 plots were sold at N1,500 per plot
Also, within the year, the creditors as of May 1, 2009, were paid off at a discount of 5%, and administration expenses of N45,000 were incurred, out of which N21,000 was unpaid as of April 30, 2010.
Income from investments (market value on October 31, 2009, was N78,000) amounted to N27,000
You are required to prepare, in respect of RUN Estate Development Ltd for the year ended April 30, 2010:
Comprehensive Income Statement (P & L Appropriation Account)
Statement of Financial Position as of the same date.

Answer rating: 100% (QA)

RUN Estates Development Limited Comprehensive Income Statement P L Appropriation Account For the year ended April 30 2010 N000 Operating Revenue Sales ... View the full answer