The information below represents the draft statement of comprehensive income of H Ltd for the year ended
Question:
The information below represents the draft statement of comprehensive income of H Ltd for the
year ended 31 December 2020.
| 2020 N$ 000 | 2019 N$ 000 |
Income | 14 600 | 12 700 |
Cost of sales | 7 200 | 6 100 |
Gross profit | 7400 | 6 600 |
Operating expenses | (3 600) | (3 200) |
Interest paid | (500) | (400) |
Profit before tax | 3 300 | 3 000 |
Taxation | (1 320) | (1200) |
Profit and total comprehensive income for the year | 1 980 | 1 800 |
|
|
|
ADDITIONAL INFORMATION:
| 2020 N$ 000 | 2019 N$ 000 |
Dividends | 500 | 400 |
Retained earnings: For year | 1480 | 1 400 |
Opening balance | 3 200 | 1 800 |
Closing balance | 4 680 | 3200 |
|
|
|
The following balances appear in the draft statement of financial position on 31 December 2020:
| 2020 N$ 000 | 2019 N$ 000 |
Deferred tax liability | 1 620 | 1 300 |
Inventory | 3 200 | 2 900 |
After completion of the draft statements, management decided to change the method for determining the cost price of inventory. It was decided to include, as from 1 January 2020, overheads in the cost of inventory. Details of inventory are as follows
31 December
| 2020 | 2019 | 2018 |
Inventory at cost |
|
|
|
New basis | 3 840 | 3 480 | 3 000 |
Old basis | 3 200 | 2 900 | 2 500 |
| 640 | 580 | 500 |
REQUIRED:
b) Prepare the statement of comprehensive income and the statement of changes in equity and disclose the relevant note to the financial statements of H Ltd for the change for the year ended 31 December 2020 in accordance with International Financial Reporting Standards.
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott