The statement of financial position below belongs to Minx ltd for the year ended 31 December 2022.

ASSETS	P'000
Non current assets
PPE	1,890
Investments	830
	2,720
current assets
Trade receivables	60
Inventories	700
Cash & Bank	1,300
	4,780
EQUITY AND LIABILITIES
Equity
shares	1,400
share premium	800
retained earnings	1,000
	3,200
non current liabilities
loan stock	980
	4,180
current liabilities
Trade payables	600
	4,780

Notes

. The business tax rate is currently 25%.

In the PPE amount, included is an asset that was bought for P260,000 two years ago and has been depreciated using straight line method at 20% per annum. The management decided to change the depreciation policy to diminishing balance at 25% to present the most accurate usage of the vehicle and the useful life is changing to 6 years not 5. Overall provision for depreciation to date for all the PPE is P 690,000. There is also a new asset that the company depreciates at 20% straight line method that should be depreciated at 25% based on tax rules. The asset was bought in the current year for P67,000.

The entity made a profit of P67,000 net tax . That was after deducting P12, 000 expense that should not have been allowed when computing taxes. The tax on that profit was already paid to the authority.

In November 2022, the operations manager had some misunderstanding with one of the employees and that let to dismissal of the employee. The matter has been taken to labour court and the company lawyer has shown that looking at the facts of the case, the company might be found liable to pay P90,000 as damages to that employee and a penalty estimated to range from P5, 000 to P7, 000 which depends on whether Trade ministry also wants to sue the entity.

There was an error in recording a credit sale of P72, 000. The sale was recorded as P27,000 on which the debtor has not yet paid at the end of the year

In the value of inventories, included is inventory valued at P25,000 which seems to have some problems because in the market it can only be sold for P26,000 after incurring some cost to sell of P6,000.

Required:

Produce a re-draft of the statement of financial position of Minx ltd for the year ended 31^st December 2022 incorporating the items in the notes. Show all the workings for the amounts that have been used to make adjustments.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below ASSETS P000 Non current assets PPE 1890 Investments 830 2720 current assets Trade receivables 60 Inventories 700 Cash Bank 1300 4780 EQUITY ... View the full answer