The following notes are relevant: HIS GLORY LTD has a policy of revaluing its land and...

  

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The following notes are relevant: HIS GLORY LTD has a policy of revaluing its land and building at cach year end. The valuation in the trial balance includes a land element of GH¢30,000. The useful life of the buildings at that date (1/1/07) was 20 years. On 31/12/07, a professional valuer valued the buildings at GH¢92,000 with no change in the value of the land. Depreciation of buildings is charged at 60% to cost of sales and 20% each to distribution costs and administrative expenses. a. During the year HIS GLORY LTD manufactured an additional plant for its operations. The details of the costs, which have been included in cost of sales in the trial balance, were: b. GH¢ 6,000 4,000 8,000 Material Cost Direct labour cost Machine time cost Directly attributable overheads 6,000 The manufacture of the plant was completed on 30/06/07 and the plant was brought into immediate use, but its cost has not yet been capitalized. All plants are depreciated at 12%% per annum (time apportioned where relevant) using the reducing balance method and charged to cost of sales. No non-current assets were sold during the year. C. The fair value of the investments held at 31/12/07 was GH¢27,100. The balance on taxation in the trial balance represents the over provision of the d. previous year's estimate. The estimated tax liability for the year ended 31/12/07 is GH¢18,700. At 31/12/07 there were GH¢40,000 of taxable temporary differences. Deferred tax provision should accordingly be adjusted to GH¢10,000 since deferred tax provision is at 25% of all taxable temporary differences. c. The directors have proposed dividend of GH¢0.40 per share for 2007. This is to be dealt with in the financial statements in accordance with LIAS 10. f. Required: Prepare for HIS GLORY LTD and in accordance with the International Financial Reporting Standards (IFRS), a) An Income Statement for the year ended 31 December, 2007. b) A Statement of Financial Position as at 31 December, 2007 Question Three The Tollowing trial balance relates to HIS GLORY LTD. a quoted company at 31" December 2007. DR GHe 130,000 CR GH¢ Land and buildings (1/1/07) Plant at cost -128,000 Depreciation of plant (1/L07) 32,000 Investments 26,500 Cost of sales 89,200 Investment income 2,200 Distribution costs 11,000 Administrative expenses 12,500 Interest on loan paid 800 Inventory 31/12/07- 37,900 400 Current Corporation Tax Trade receivables 35,100 Revenue 180,400 60,000 Ordinary shares (issued at GH¢1 cach) Retained earnings (1/1/07) 25,500 2% loan (2005 - 2010)- 80,000 Trude payables. 34,700 Revaluation surplus arising from land & building- 14,000 Deferred tax provision (1/1/07)- -11,200 Accruals ১4.000 Bank 6.600 471.000 471.000 The following notes are relevant: HIS GLORY LTD has a policy of revaluing its land and building at cach year end. The valuation in the trial balance includes a land element of GH¢30,000. The useful life of the buildings at that date (1/1/07) was 20 years. On 31/12/07, a professional valuer valued the buildings at GH¢92,000 with no change in the value of the land. Depreciation of buildings is charged at 60% to cost of sales and 20% each to distribution costs and administrative expenses. a. During the year HIS GLORY LTD manufactured an additional plant for its operations. The details of the costs, which have been included in cost of sales in the trial balance, were: b. GH¢ 6,000 4,000 8,000 Material Cost Direct labour cost Machine time cost Directly attributable overheads 6,000 The manufacture of the plant was completed on 30/06/07 and the plant was brought into immediate use, but its cost has not yet been capitalized. All plants are depreciated at 12%% per annum (time apportioned where relevant) using the reducing balance method and charged to cost of sales. No non-current assets were sold during the year. C. The fair value of the investments held at 31/12/07 was GH¢27,100. The balance on taxation in the trial balance represents the over provision of the d. previous year's estimate. The estimated tax liability for the year ended 31/12/07 is GH¢18,700. At 31/12/07 there were GH¢40,000 of taxable temporary differences. Deferred tax provision should accordingly be adjusted to GH¢10,000 since deferred tax provision is at 25% of all taxable temporary differences. c. The directors have proposed dividend of GH¢0.40 per share for 2007. This is to be dealt with in the financial statements in accordance with LIAS 10. f. Required: Prepare for HIS GLORY LTD and in accordance with the International Financial Reporting Standards (IFRS), a) An Income Statement for the year ended 31 December, 2007. b) A Statement of Financial Position as at 31 December, 2007 Question Three The Tollowing trial balance relates to HIS GLORY LTD. a quoted company at 31" December 2007. DR GHe 130,000 CR GH¢ Land and buildings (1/1/07) Plant at cost -128,000 Depreciation of plant (1/L07) 32,000 Investments 26,500 Cost of sales 89,200 Investment income 2,200 Distribution costs 11,000 Administrative expenses 12,500 Interest on loan paid 800 Inventory 31/12/07- 37,900 400 Current Corporation Tax Trade receivables 35,100 Revenue 180,400 60,000 Ordinary shares (issued at GH¢1 cach) Retained earnings (1/1/07) 25,500 2% loan (2005 - 2010)- 80,000 Trude payables. 34,700 Revaluation surplus arising from land & building- 14,000 Deferred tax provision (1/1/07)- -11,200 Accruals ১4.000 Bank 6.600 471.000 471.000

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Working notes are as follows Income statement for the year ended 31 Dec 2007 Cost of sales 89200 Re... View the full answer