The following trial balance relates to Morgan at 31 March 2019: Leasehold property - at valuation...

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The following trial balance relates to Morgan at 31 March 2019: Leasehold property - at valuation 31 March 2018 (note (i)) K'000 25,200 K'000 Plant and equipment (owned) - at cost (note (i)) 46,800 Right-of-use-assets - at cost (note (i)) 20,000 Accumulated depreciation at 31 March 2018: Owned plant and equipment 12,800 Right-of-use plant 5,000 Lease payment (paid on 31 March 2019) (note (i)) 6,000 Lease liability at 1 April 2018 (note (i)) 15,000 Contract with customer (note (ii)) 14,000 Inventory at 31 March 2019 28,000 Trade receivables Bank Trade payables Revenue (note (iii)) Cost of sales (note (iii)) Distribution cost Administrative expenses 33,100 5,500 33,400 310,000 234,500 19,500 27,500 Equity dividend paid. Equity shares of 50 cents each Returned earnings at 31 March 2018 Current tax (note (iv)) Deferred tax (note (iv)) 8,000 40,000 44,100 700 8,400 469,300 469,300 The following notes are relevant: I. II. Non-current assets the 15-year leasehold property was acquired on 1 April 2017 at a cost of K30 million. The Accounting is to revalue the property at fair value at each year end. The valuation in the trial balance of K25,2 million as at 31 March 2018 led to an impairment charge of K2.8 million which was reported in the statement of profit or loss and other comprehensive income in the year ended 31 March 2018. At 31 March 2019 the property was valued at K24.9 million. Owned plant is depreciated at 25% per annum using the reducing balance method. The right-of-use was acquired on 1 April 2017. The rentals are K6 million per annum for four years payable in arrears on 31 March each year. The interest rate implicit in the lease is 8% per annum. Right- of-use plant is depreciated over the lease period. No depreciation has yet been charged on any non-current assets for the year ended 31 March 2019. All depreciation is charged to cost of sale. On 1 October 2018 Morgan entered into a contract to construct a bridge over a river. The performance obligation will be satisfied over time. The agreed price of the bridge is K50 million, and construction was expected to be completed on 30 September 20Y0. The K14.3 million in the trial balance is: Materials, labour and overheads Specialist plant acquired 1 October 2018 Payment from customer &000 12,000 8,000 (5,700) 14,300 III. IV. The sale value of the work done at 31 March 2019 has been agreed at K22 million and the estimated cost to complete (excluding plant depreciation) is K10 million. The specialist plant will have no residual value at the end of the contract and should be depreciated monthly. Pricewell recognizes progress towards satisfaction of the performance obligation on the output basis as determined by the agreed work to date compared to the total contract price. Mogan revenue includes K8 million for goods it sold acting as an agent for Trilby. Morgan earned a commission of 20% on these sales and remitted the difference of K6.4 million (included in cost of sales) to Trilby. The directors have estimated the provision of income tax for the year ended 31 March 2019 at K4.5 million. The required deferred tax provision at 31 March 2019 is K5.6 million. All adjustments to deferred tax should be taken to the statement of profit or loss. The balance of current tax in the trial balance represents the under/over provision of income tax liability for the year ended 31 March 2018. Required: a. Prepare the statement of profit or loss and other comprehensive income for the year ended 31 March 2019. (18 marks) b. Prepare the statement of financial position as at 31 March 2019. (22 marks) The following trial balance relates to Morgan at 31 March 2019: Leasehold property - at valuation 31 March 2018 (note (i)) K'000 25,200 K'000 Plant and equipment (owned) - at cost (note (i)) 46,800 Right-of-use-assets - at cost (note (i)) 20,000 Accumulated depreciation at 31 March 2018: Owned plant and equipment 12,800 Right-of-use plant 5,000 Lease payment (paid on 31 March 2019) (note (i)) 6,000 Lease liability at 1 April 2018 (note (i)) 15,000 Contract with customer (note (ii)) 14,000 Inventory at 31 March 2019 28,000 Trade receivables Bank Trade payables Revenue (note (iii)) Cost of sales (note (iii)) Distribution cost Administrative expenses 33,100 5,500 33,400 310,000 234,500 19,500 27,500 Equity dividend paid. Equity shares of 50 cents each Returned earnings at 31 March 2018 Current tax (note (iv)) Deferred tax (note (iv)) 8,000 40,000 44,100 700 8,400 469,300 469,300 The following notes are relevant: I. II. Non-current assets the 15-year leasehold property was acquired on 1 April 2017 at a cost of K30 million. The Accounting is to revalue the property at fair value at each year end. The valuation in the trial balance of K25,2 million as at 31 March 2018 led to an impairment charge of K2.8 million which was reported in the statement of profit or loss and other comprehensive income in the year ended 31 March 2018. At 31 March 2019 the property was valued at K24.9 million. Owned plant is depreciated at 25% per annum using the reducing balance method. The right-of-use was acquired on 1 April 2017. The rentals are K6 million per annum for four years payable in arrears on 31 March each year. The interest rate implicit in the lease is 8% per annum. Right- of-use plant is depreciated over the lease period. No depreciation has yet been charged on any non-current assets for the year ended 31 March 2019. All depreciation is charged to cost of sale. On 1 October 2018 Morgan entered into a contract to construct a bridge over a river. The performance obligation will be satisfied over time. The agreed price of the bridge is K50 million, and construction was expected to be completed on 30 September 20Y0. The K14.3 million in the trial balance is: Materials, labour and overheads Specialist plant acquired 1 October 2018 Payment from customer &000 12,000 8,000 (5,700) 14,300 III. IV. The sale value of the work done at 31 March 2019 has been agreed at K22 million and the estimated cost to complete (excluding plant depreciation) is K10 million. The specialist plant will have no residual value at the end of the contract and should be depreciated monthly. Pricewell recognizes progress towards satisfaction of the performance obligation on the output basis as determined by the agreed work to date compared to the total contract price. Mogan revenue includes K8 million for goods it sold acting as an agent for Trilby. Morgan earned a commission of 20% on these sales and remitted the difference of K6.4 million (included in cost of sales) to Trilby. The directors have estimated the provision of income tax for the year ended 31 March 2019 at K4.5 million. The required deferred tax provision at 31 March 2019 is K5.6 million. All adjustments to deferred tax should be taken to the statement of profit or loss. The balance of current tax in the trial balance represents the under/over provision of income tax liability for the year ended 31 March 2018. Required: a. Prepare the statement of profit or loss and other comprehensive income for the year ended 31 March 2019. (18 marks) b. Prepare the statement of financial position as at 31 March 2019. (22 marks)