- 20 Marks
CIBG – FRPA 2022 – L3 – Q1B – Easy Way Limited Financial Statements
Prepare the statement of comprehensive income and statement of financial position for Easy Way Limited as at 31 December 2021 using the given trial balance and additional information.
Question
EASY WAY LIMITED
The list of balances of Easy Way Limited shows the following balances at 31st December 2021.
| Dr GH¢000 | Cr GH¢000 |
|---|---|
| Share capital (600,000 shares) | 320 |
| General reserve | 20 |
| Accumulated profit 1 January 2021 | 50 |
| Inventory (goods for resale) at 1 January 2021 | 60 |
| Revenue | 1,000 |
| Purchases | 540 |
| Purchases returns | 26 |
| Sales returns | 28 |
| Carriage outwards | 28 |
| Warehouse wages | 80 |
| Sales representatives salaries | 60 |
| Administrative wages | 40 |
| Warehouse plant and equipment cost | 126 |
| Accumulated depreciation — 1 January 2021 | 50 |
| Delivery vehicle hire | 20 |
| Goodwill | 100 |
| Distribution expenses | 10 |
| Administrative expenses | 30 |
| Directors’ salaries (charge to administrative expenses) | 30 |
| Rental income | 16 |
| Trade receivables | 330 |
| Cash at bank | 60 |
| Trade payables | 60 |
| 1,542 | 1,542 |
The following additional information has been provided: (1) Inventory of goods for resale at 31 December 2021 amounted to GH¢100,000. (2) Annual depreciation on warehouse plant and equipment of GH¢32,000 should be provided. (3) Income tax expense for 2021 amounts to GH¢50,000. (4) The recoverable amount of goodwill was GH¢90,000.
You are required to prepare: a) the company’s statement of comprehensive income for the year to 31 December 2021; and b) a statement of financial position at that date in accordance with IAS 1: Presentation of Financial Statements. (20 marks)
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