1. ABC Limited’s financial year ends on 31 December. The following balances relate to the
company and were available its books on 31 December 2024.
Land and buildings (Land, at valuation $380 000)
Provision for depreciation on buildings, 1 January 2024
Office furniture, at cost
Provision for depreciation on office furniture, 1 January 2024
Motor vehicles, at cost
Provision for depreciation on motor vehicles, 1 January 2024
Revenue
Revaluation reserve
Purchases
Ordinary shares of $1.50 each
Share premium
General reserves, 1 January 2024
Retained earnings, 1 January 2024
Carriage on sales
Carriage on purchases
Discount received
Bad debts recovered
Interest on debentures paid
Cash and cash equivalent
Trade receivables
Trade payables
Ordinary dividends paid
Inventory, 1 January 2024
Irrecoverable debts
Rent income
Allowance for doubtful debts, 1 January 2024
General expenses
15% debentures
$
500 000
44 000
358 000
58 000
350 000
75 000
938 000
40 000
575 000
300 000
150 000
21 000
211 800
18 900
16 500
11 500
34 000
15 500
74 000
105 000
44 000
21 000
45 000
12 300
16 774
5 775
13 649
155 000
Additional information
1) Inventory was valued at $47 000 on 31 December 2024. Included in the figure is
damaged inventory costing $17 000. The inventory can be sold at $4 000 less than the
cost.
2) A cheque of $21 000 was received from Emmanuel, a trade receivable who was
previously written off as irrecoverable debt. The amount received was in full
settlement of $24 000.
3) The company directors created a specific allowance of $5 000 and a general
allowance of 4% on trade receivables.
4) A cheque paid to Khumalo Ltd, a supplier, $20 000, had been included in books as $2
000. A cash discount of 10% was received for prompt payment.
5) A transfer of $10 000 was made to the general reserves and a proposed dividends of
$0.15 per share was made by the company’s directors.
6) Land was revalued to $320 000.
7) Depreciation is provided as follows:
- Buildings at 5% per annum on cost
- Office furniture at 15% per annum on reducing balance method
- Motor vehicles at 10% per annum on diminishing balance method.
8) Corporate tax for the year was $35 000
REQUIRED
a) Statement of profit or loss for the year ended 31 December 2024.
[15]
b) Statement of changes of equity for the year ended 31 December 2024. [10]
c) Statement of financial position as at 31 December 2024.
[10]