D&A S

NOTES TO THE ACCOUNTS

(i) SALE OR RETURN BASIS - IFRS 15 (REVENUE)
According to the revenue recognition criteria under IFRS 15, the sale or return transaction in December 2020 does not qu
recognised as revenue in the books of accounts for the year ended 31/12/2020 as control has not been fully passed on to t
since they could return the goods within the first three months of sale. Only after the three months return period (which i
end on March 2021) can revenue be recognised, in which case the company would then have completely parted ways wit
control fully passed on to the customer

Reversal of the revenue treatment of the sale or return transaction

Revenue wrongly credited to the income statement (GHC'000) 10,000.00
CORRECTION OF ERROR - DOUBLE ENTRY DEBIT
GHC'000
Dr. Revenue 10,000.00
Cr. Deferred income liability

Margin on company's sales 30%

Cost of the goods sold on the sale and return basis 7,000.00

According to the additional information, this sale or return transaction was excluded from the closing inventory. This mea
GHC 7,000.00 cost of those goods sold was not deducted from the closing inventory and as such wasn't factored in the c
computation. Now, that is rightful treatment as the transaction did not qualify under IFRS 15 to be recognised as revenu
company still retains control over the goods. Hence, no further adjustment would be required in respect of this

(ii) CONSTRUCTION CONTRACT - IFRS 15

GHC'000
Contract Price (initiated on 1/01/2020) 30,000.00
Amount billed to date (1/01/2020 to 31/12/2020) 16,000.00

Determining the % Progress of contract using the input method or costs of construction
Cost incurred to date (01/01/2020 to 31/12/2020) 20,000.00
Cost to complete as at 31/12/2020 5,000.00
Total cost of contract 25,000.00
% Progress 80%

Therefore, contract revenue earned from 1/01/2020 to 31/12/2020 24,000.00

Contract asset (Revenue earned to date > Amount billed to date) 8,000.00

(iii) NON-CURRENT ASSETS

A. PROPERTY, PLANT & EQUIPMENT (PPE) SCHEDULE - IAS 16 Land
GHC'000
Cost 10,000.00
Accumulated depreciation as at 01/01/2020 -
Carrying value as at 01/01/2020 10,000.00

Previous depreciation method on Building: 2.5% straight line on cost

Depreciation from 01/01/2020 to 30/06/2020 (1st 6 months before revaluation)
Carrying value as at 30/06/2020 or 01/07/2020 10,000.00
Revaluation gain as at 01/07/2020 3,000.00
Fair value or stated value as at 1/07/2020 13,000.00

Depreciation methods:
Building - remaining useful life after revaluation
Owned Plant and Equipment (straight line)

Depreciation charge for the year (For Building - 2nd 6 months after revaluation) -

Carrying value as at 31/12/2020 13,000.00

B. LEASED PLANT - IFRS 16

1. Right of use asset
Initial measurement (PV of total lease payments) as at 1/01/2020 35,000.00
Lease term (in years) 5
Depreciation for the year - 7,000.00
Carrying value (subsequent measurement) as at 31/12/2020 28,000.00

2. Lease liability
Initial measurement (PV of future lease payments) 35,000.00
Implicit lease interest rate 10%
Annual lease payments in arreas 9,200.00

Subsequent measurement (using the amortisation table)

Year Balance b/d
Dates 1-Jan
(A)
2020 35,000.00
2021 29,300.00

Finance cost on lease for the 2020 financial year 3,500.00

Current liability = Next lease payment (on 31/12/2021) - Interest between year-end
6,270.00
(31/12/2020) and next lease payment (on 31/12/2021)
Non-current liability = Year-end (31/12/2020) liability - Current liability 23,030.00

(iv) INCOME TAX - IAS 12

Year-end current tax estimate for the reporting period ended 31/12/2020 3,000.00
Tax rate 25%
Dr. current tax in the trial balance (under provision from the previous period) 1,000.00
Cr. deferred tax in the trial balance (indicate the deferred tax liability at the 8,000.00
previous year-end, 31/12/2019)

Taxable Temporary Difference (Taxable, since Asset's Carrying Value > Tax Base; 30,000.00
leading to Deferred tax liability ), excluding revaluation on building
 Taxable Temporary Difference (Taxable, since Asset's Carrying Value > Tax Base;
leading to Deferred tax liability ), excluding revaluation on building

Deferred tax liability as at 31/12/2020, excluding revaluation on building 7,500.00

Decrease in deferred tax liability from 31/12/2019 to 31/12/2020, excluding 500.00

revaluation on building

Revaluation gain on building [N(iii)(1)] 5,500.00

Deferred tax on revaluation 1,375.00

Total deferred tax liability as at 31/12/2020 8,875.00

Computation of tax to be charged to the 2020 income statement

GHC'000
Year-end estimate of tax for the reporting period 3,000.00
Add: Under provision of tax from the previous period 1,000.00
Less: Over provision of tax from the previous period -
Add: Increase in deferred tax liability (excluding revaluation of PPE) -
Less: Decrease in deferred tax liability (excluding revaluation of PPE - 500.00
Tax charge for the period 3,500.00

(v) FINANCIAL INSTRUMENTS - IFRS 7 & 9

Issue of loan note is a financial liability and must be measured at amorised c
Initial measurement at fair value 40,000.00
Loan coupon interest rate 10%
Annual coupon interest amount 4000.00
Effective market yield 15%

Subsequent measurement (using the amortisation table)

Year Balance b/d
Dates 1-Jan
(A)
2020 40,000.00
2021 42,000.00
2022 44,300.00
2023 46,945.00

Finance cost on loan for the 2020 financial year 6,000.00

Loan financial liability as at 31/12/2020 42,000.00

D&A TU
 D&A SOLUTION TO Q1 OF ACCT 302 FR II FIN
IN THE BOOKS OF "THIS BY FA
E ACCOUNTS
REVENUE)
ction in December 2020 does not qualify to be
rol has not been fully passed on to the customer
hree months return period (which is after year-
n have completely parted ways with goods and

n transaction

CREDIT
GHC'000

10,000.00

rom the closing inventory. This means that the

nd as such wasn't factored in the cost of sales
IFRS 15 to be recognised as revenue since the
would be required in respect of this.

RENT ASSETS
Building P&E Total
GHC'000 GHC'000 GHC'000
 40,000.00 60,000.00 110,000.00
- 10,000.00 - 20,000.00 - 30,000.00
30,000.00 40,000.00 80,000.00

2.50%
- 500.00 - 500.00
29,500.00
5,500.00 8,500.00
35,000.00

25
20%

- 700.00 - 12,000.00 - 12,700.00

34,300.00 28,000.00 75,300.00

NT - IFRS 16

iability

ing the amortisation table)

Effective interest Sub-total Lease payments Balance b/d
01 - Jan to 31 - Dec 31-Dec 31-Dec 31-Dec
(B) (C) = (A) + (B) (D) (E) = (D) - (C)
3,500.00 38,500.00 9,200.00 29,300.00
2,930.00 32,230.00 9,200.00 23,030.00
MENTS - IFRS 7 & 9
d must be measured at amorised cost

ing the amortisation table)

Effective interest Sub-total Coupon Interest Balance b/d
01 - Jan to 31 - Dec 31-Dec 31-Dec 31-Dec
(B) (C) = (A) + (B) (D) (E) = (D) - (C)
6,000.00 46,000.00 4,000.00 42,000.00
6,300.00 48,300.00 4,000.00 44,300.00
6,645.00 50,945.00 4,000.00 46,945.00
7,041.75 53,986.75 4,000.00 50,000.00

D&A TUTOR: EMMANUEL KWAMI

1 OF ACCT 302 FR II FINAL ACCOUNTS TUTORIAL SET
BOOKS OF "THIS BY FAR GRACE PLC"
FINANCIAL STATEMENTS FOR THE
A. COMPREHENSIVE INCOME STATEMENT FOR THE YEAR-ENDED 31/12/2020
GHC'000 GHC'000
Revenue {[N(i)] & [N(ii)]} 248,800.00
Less: Cost of sales {[N(ii)] & [N(iii)(1)] & [N(iii)(2)]} - 204,700.00
Gross profit 44,100.00
Less: Administrative expenses - 16,500.00
Less: Distribution cost - 13,500.00 - 30,000.00
Operating profit 14,100.00
Less: Finance cost {[[N(iii)(2)] & [N(v)]} - 10,400.00
Profit before tax 3,700.00
Less: Tax [N(iv)] - 3,500.00
Profit after tax 200.00

Other comprehensive income

Add: Revaluation gain on land and building [N(iii)(1)] 8,500.00
Less: Deferred tax on revaluation of building [N(iv)] - 1,375.00 7,125.00

TOTAL COMPREHENSIVE INCOME 7,325.00

B. STATEMENT OF FINANCIAL POSITION AS AT 31/12/2020

GHC'000 GHC'000
ASSETS
NON-CURRENT ASSET
PPE [N(iii)(1)] 75,300.00
Right-of-use asset [N(iii)(2)] 28,000.00 103,300.00

CURRENT ASSET
Inventory 26,600.00
Trade receivables 56,000.00
Contract asset [N(ii)] 8,000.00 90,600.00

TOTAL ASSETS 193,900.00

EQUITY AND LIABILITIES

EQUITY
Equity shares @ GHC 0.20 45,000.00
Retained earnings 27,000.00
Revaluation/capital surplus 7,125.00 79,125.00

NON-CURRENT LIABILITY
10% Loan note [N(v)] 42,000.00
Lease liability [N(iii)(2)] 23,030.00
Deferred tax liability [N(iv)] 8,875.00 73,905.00

CURRENT LIABILITY
Trade payables 14,300.00
Current tax liability [N(iv)] 3,000.00
Lease liability [N(iii)(2)] 6,270.00
Bank overdraft 7,300.00
Deferred income liability [N(i)] 10,000.00 40,870.00

TOTAL EQUITY AND LIABILITY 193,900.00

ANUEL KWAMI AGBEVIVI (02428316
S TUTORIAL SET

TATEMENTS FOR THE 2020 REPORTING PERIOD

B. STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31/12/2020
Ordinary share capital Retained earnings
GHC'000 GHC'000
Bal b/d as at 01/01/2020 (Opening balance) 45,000.00 26,800.00

Movements during the year

Net profit for the year - 200.00
No dividend paid - -
Other comprehensive income - -

Bal b/d as at 31/12/2020 (end of year balance) 45,000.00 27,000.00

(0242831612)
DED 31/12/2020
Capital reserve Total
GHC'000 GHC'000
- 71,800.00

- 200.00
- -
7,125.00 7,125.00

7,125.00 79,125.00
 D&A SOLUTION

D. NOTES TO THE ACCOUNTS

(i) EARNINGS PER SHARE (IAS 33) - A right issue on 1/07/2018
This fully subscribed right issue has already been accounted meaning that the shares
figure in the trial balance includes the right issue

Share capital as per trial balance (in units rouunded in '000) 250,000.00

Right issue ratio = 1 new share for 4 existing shares

Ratio equivalent for new right issue share 1
Ratio equivalent for existing total shares before right issue 4
Ratio equivalent for new total shares after right issue 5

DETERMINING 1ST ORDINARY DIVIDEND BEFORE RIGHT ISSUE

1st Ordinary dividend on 29/02/2018 @ 3p per share 0.03
Total number of existing shares before right issue 200,000.00
Total dividend paid on 29/02/2018 6,000.00

DETERMINING 2ND ORDINARY DIVIDEND BEFORE RIGHT ISSUE

2nd Ordinary dividend on 31/10/2018 @ 5p per share 0.05
New total number of shares after right issue 250,000.00
Total dividend paid on 31/10/2018 12,500.00

Total dividend paid for the reporting period ended 31/12/2018,

18,500.00
wrongly included in administrative expense
CORRECTION OF ERROR - DOUBLE ENTRY DEBIT CREDIT
GHC'000 GHC'000
Dr. Income surplus 18,500.00
Cr. Administrative expense 18,500.00

(ii) FINANCIAL INSTRUMENTS - IFRS 7 & 9

1. FINANCIAL LIABILITY - Issue of loan note is a financial liability and must be measured at amo
Nominal value of 8% loan note (in GHC'000) 30,000.00 Loan coupon interest rate
Discount on issue - Annual coupon interest amount
Transaction cost - Effective market yield
Initial measurement at fair value (in GHC'000) 30,000.00

Subsequent measurement (using the amortisation table)

 Year Balance b/d Effective interest Sub-total
Dates 1-Jan 01 - Jan to 31 - Dec 31-Dec
(A) (B) (C) = (A) + (B)
GHC'000 GHC'000 GHC'000
2017 30,000.00 3,000.00 33,000.00
2018 30,600.00 3,060.00 33,660.00
2019 31,260.00 3,126.00 34,386.00
2020 31,986.00 3,198.60 35,184.60

Finance cost on loan for the 2018 financial year - 3,060.00

Loan financial liability as at 31/12/2018 31,260.00

2. FINANCIAL ASSET - Investment in equity instruments

An irrecoverable election to measure these equity investments at fair value through
other comprehensive income
GHC'000
Carrying value as at 01/01/2018 (as per trial balance) 15,800.00
Fair value as at year-end, 31/12/2018 13,500.00

Revaluation loss on equity investments for the 2018 to be - 2,300.00

included in other comprehensive income

(iii) NON-CURRENT ASSETS

A. PROPERTY, PLANT & EQUIPMENT (PPE) Land Building P&E
SCHEDULE - IAS 16 GHC'000 GHC'000 GHC'000
Cost - - 67,400.00
Accumulated depreciation as at 01/01/2018 - - - 13,400.00
Carrying value as at 01/01/2018 7,000.00 36,000.00 54,000.00
Additions
Add: Decontamination provision on new plant
- - 4,000.00
(bought on 01/01/2018)
Total 7,000.00 36,000.00 58,000.00

Analysis of Plant and Equipment

Total value of new Plant bought on 01/01/2018 @ GHC 10m 14,000.00
Value of Other Plant and Equipment 44,000.00

Depreciation methods:
Building - remaining useful life after 2017 year-end valuation 18
New Plant bought on 01/01/2018 (useful life - straight line) 10
Other Plant and Equipment (rate - Reducing balance) 12.50%

Less: Depreciation charge for the year - - 2,000.00 - 6,900.00

Carrying value as at 31/12/2018 7,000.00 34,000.00 51,100.00

 Revaluation of Land and Building as at year-end, 31/12/2018
Total Carrying Value of land and building 41,000.00
Add: Revaluation gain on land and building 800.00
Fair value or restated value as at 31/12/2018 41,800.00

B. PLANT DECONTAMINATION PROVISION - IAS 16 & 37

Present value of decontamination cost at the end of New plant's
4,000.00
10 years useful life, using a discount rate of 10%

INITIAL REGONITION AS AT 01/01/2018 - DOUBLE DEBIT CREDIT

ENTRY GHC'000 GHC'000
Dr. Plant and Machinery 4,000.00
Cr. Decontamination Provision 4,000.00

THE SUBSEQUENT MEASUREMENT IS TO UNWIND THE 10% DISCOUNT RATE ON THE

LIABILITY
Discount rate 10%

Finance cost (unwinded interest) from 01/01/2018 to 31/12/2018 - 400.00

Carrying value of decontamination provision as at 31/12/2018 4,400.00

(iv) INCOME TAX - IAS 12

GHC'000
Year-end current tax estimate for the 2018 reporting period 5,600.00
Tax rate 25%
Dr. current tax in the trial balance (Previous period under-
900.00
provision)
Cr. deferred tax in the trial balance (indicate the deferred tax
4,000.00
liability at the previous year-end, 31/12/2017)

Taxable Temporary Difference (Taxable - since Asset's Carrying

Value > Tax Base; leading to Deferred tax liability ), excluding 15,000.00
revaluation

Deferred tax liability as at 31/12/2018, excluding revaluation 3,750.00

Decrease in deferred tax liability from 31/12/2017 to

250.00
31/12/2018, excluding revaluation on building

The question states deferred tax on revaluation and capital surpluses should be ignored

Total deferred tax liability as at 31/12/2018 3,750.00

Computation of tax to be charged to the 2018 income statement
GHC'000
Year-end estimate of tax for the 2018 reporting period 5,600.00
Add: Previous period under provision of current tax 900.00
Less: Previous period over provision of current tax -
Add: Increase in deferred tax liability (excluding revaluation) -
Less: Decrease in deferred tax liability (excluding revaluation) - 250.00
Tax charge for the period 6,250.00

D&A TUTOR: E
OLUTION TO Q2 OF ACCT 302 FR II FI
IN THE BOOKS OF HALLEL
TS FIN
A. COMPREHENSIVE INCOME STATEMENT FOR THE YEAR-ENDED 31/12/2018

Revenue
Less: Cost of sales [N(iii)]
Gross profit
Less: Administrative expenses [N(i)]
Less: Distribution cost
Operating profit
Add: Investment income/Finance Income
Less: Finance cost {[[N(ii)] & [N(iii)(B)]}
Profit before tax
Less: Tax [N(iv)]
Profit after tax

Other comprehensive income

Add: Revaluation gain on land and building [N(iii)(A)]
Less: Revaluation loss on equity investment

TOTAL COMPREHENSIVE INCOME

C. STATEMENT OF FINANCIAL POSITION AS AT 31/12/2018

ASSETS
NON-CURRENT ASSET
PPE [N(iii)(A)]
Financial Asset [N(ii)(2)]

S7&9 CURRENT ASSET

must be measured at amorised cost Inventory

n coupon interest rate 8% Trade receivables
ual coupon interest amount 2400.00 Cash
ctive market yield 10%
TOTAL ASSETS

n table) EQUITY AND LIABILITIES

 Coupon Interest Balance b/d EQUITY
31-Dec 31-Dec Stated capital (250m shares)
(D) (E) = (D) - (C) Income surplus
GHC'000 GHC'000 Capital/Revaluation surplus
2,400.00 30,600.00 Other equity reserve
2,400.00 31,260.00
2,400.00 31,986.00 NON-CURRENT LIABILITY
2,400.00 32,784.60 8% Loan note [N(ii)(1)]
Decommissioning provision
Deferred tax liability

CURRENT LIABILITY
Trade payables
Current tax liability [N(iv)]
Bank overdraft

TOTAL EQUITY AND LIABILITY

Total
GHC'000
67,400.00
- 13,400.00
97,000.00

4,000.00

101,000.00

- 8,900.00

92,100.00
OR: EMMANUEL KWAMI
02 FR II FINAL ACCOUNTS TUTORIAL
S OF HALLELUJAH LTD
FINANCIAL STATEMENTS FOR THE 2018 REPORTING PERI
FOR THE YEAR-ENDED 31/12/2018 B. STATEMENT OF CHANGES IN EQUI
GHC'000 GHC'000
182,500.00
- 137,400.00 Bal b/d as at 01/01/2018 (Opening balance)
45,100.00
- 6,500.00 Movements during the year
- 8,500.00 - 15,000.00 Right issue of 1 for 4 shares @ GHC 0.42
30,100.00 Net profit for the year
700.00 Dividend paid
- 3,760.00 Gain on revaluation of land and building
27,040.00 Loss on revaluation of equity instruments
- 6,250.00
20,790.00 Bal b/d as at 31/12/2018 (end of year balance)

800.00
- 2,300.00 - 1,500.00

19,290.00

OSITION AS AT 31/12/2018
GHC'000 GHC'000

92,900.00
13,500.00 106,400.00

19,800.00
29,000.00
- 48,800.00

155,200.00
61,000.00
14,390.00
5,500.00
3,000.00 83,890.00

31,260.00
4,400.00
3,750.00 39,410.00

21,700.00
5,600.00
4,600.00 31,900.00

155,200.00
KWAMI AGBEVIVI (02428
S TUTORIAL SET

2018 REPORTING PERIOD

TATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31/12/2018
Ordinary share capital Income Surplus Capital reserve Other equity reserve
GHC'000 GHC'000 GHC'000 GHC'000
40,000.00 12,100.00 7,000.00 3,000.00

21,000.00 - - -
- 20,790.00 - -
- - 18,500.00 - -
- - 800.00 -
- - - 2,300.00 -

61,000.00 14,390.00 5,500.00 3,000.00

I (0242831612)
 Total
GHC'000
62,100.00

21,000.00
20,790.00
- 18,500.00
800.00
- 2,300.00

83,890.00
 D&A SOLUTION

C. NOTES TO THE ACCOUNTS

(i) & (ii) NON-CURRENT ASSETS - BOTH TANGIBLE AND NON-TANGIBL
A. PROPERTY, PLANT & EQUIPMENT (PPE) & Building P&E Dev't cost
INTANGIBLES SCHEDULE - IAS 16 & IAS 38 GHC'000 GHC'000 GHC'000
Cost - 76,600.00 20,000.00
Accumulated depreciation as at 01/01/2020 - - 24,600.00 - 6,000.00
Carrying value as at 01/01/2018 50,000.00 52,000.00 14,000.00
Disposal
Less: Carrying value of disposed plant on 01/01/2020) - - - 4,000.00 -
Cost (GHC 8m) & Acc. Dep (GHC 4m)
Additions
Add: Capitalisation of development cost starts from - - 7,200.00
01/04/2020 to 31/12/2020 (9 months * GHC 800,000)
Total 50,000.00 48,000.00 21,200.00

Depreciation methods:
Building (remaining life after 2019 year-end valuation) 20
Plant and Equipment (rate - Reducing balance) 20%
Development cost (20% on cost - straight line) 20%

Less: Depreciation charge for the year - 2,500.00 - 9,600.00 - 5,080.00

Carrying value as at 31/12/2020 47,500.00 38,400.00 16,120.00

Less: Revaluation loss on leasehold property - 4,500.00 - -
Fair value or restated value as at 31/12/2020 43,000.00 38,400.00 16,120.00

B. Proceeds from disposal of plant wrongly credited to revenue 2,500.00

CORRECTION OF ERROR - DOUBLE ENTRY DEBIT CREDIT
GHC'000 GHC'000
Dr. Revenue 2,500.00
Cr. Plant disposal a/c 2,500.00

(III) PROVISION, CONTINGENT LIABILITY & CONTINGENT ASSET - IAS 37

The company is being sued by a customer
Damages claim made the customer 2000
Provison made by the company 400
 Legal opinion states a 20% chance of the company losing the case. Since this below 50%, it implies a low probability th
company would eventually have to pay the aclaimed damages. According to IAS 37, it is therefore not probable that th
of damages payments would occur, hence no provision is required to made in respect of the full amount of the aclai
damages. However, the 20% represent a possiblitiy of occurance, and for that matter a disclosure should be made in th
in respect of this, if material, stating the nature and an estimate of the financial effects

Unrecoverable legal cost of defense 100

The unrecoverable legal cost of defense should be provided for since its likelihood is probable

Therefore, total provison in respect of the lawsuit as at 31/12/2020 100

Adjustment to the accounts in respect of previous provision of GHC 400 300

CORRECTION OF ERROR - DOUBLE ENTRY DEBIT CREDIT

GHC'000 GHC'000
Dr. Trade payables and Provision 300.00
Cr. Administrative expense 300.00

(iv) FINANCIAL INSTRUMENTS - IFRS 7 & 9

Issue of redeemable preference shares is a financial liability and must be measured at amorised cos
Initial measurement at fair value 20,000.00
Fixed annual dividend rate 8%
Fixed annual dividend amount 1600.00
Effective market yield 12%

Subsequent measurement (using the amortisation table)

Year Balance b/d Effective interest Sub-total @
Dates 1-Apr 01 - Apr to 31 - Dec year-end
(A) (B) (C) = (A) + (B)
2020 20,000.00 1,800.00 21,800.00

Finance cost on preference shares for the 2020 financial year 1,800.00
Preference shares financial liability as at 31/12/2020 20,600.00

(v) INCOME TAX - IAS 12

GHC'000
Year-end current tax estimate for the 2018 reporting period 11,400.00
Tax rate 25%
No overprovision or underprovision of tax from Previous period -
Cr. deferred tax in the trial balance (indicate the deferred tax liability
5,800.00
at the previous year-end, 31/12/2019)
 Deferred tax liability as at 31/12/2020, excluding revaluation 6,000.00

Increase in deferred tax liability from 31/12/2019 to 31/12/2020,

200.00
excluding revaluation on leasehold property

The question states deferred tax on revaluation and capital surpluses should be ignored

Total deferred tax liability as at 31/12/2020 6,000.00

Computation of tax to be charged to the 2020 income statement

GHC'000
Year-end estimate of tax for the 2018 reporting period 11,400.00
Add: Previous period under provision of current tax -
Less: Previous period over provision of current tax -
Add: Increase in deferred tax liability (excluding revaluation) 200.00
Less: Decrease in deferred tax liability (excluding revaluation) -
Tax charge for the period 11,600.00

D&A TUTOR: EM
UTION TO Q3 OF ACCT 302 FR II FINA
IN THE BOOKS OF GOD IS LO
TS FINAN
NON-TANGIBLE A. COMPREHENSIVE INCOME STATEMENT FOR THE YEAR-ENDED
Total
GHC'000 Revenue [N(i)&(ii)(B)]
96,600.00 Less: Cost of sales [N(i)&(ii)(A)]
- 30,600.00 Gross profit
116,000.00 Less: Administrative expenses [N(iii)]
Less: Distribution cost
Less: Uncapitalised Research & dev't cost [N(i)&(ii)(A)]
- 4,000.00
Less: Loss on disposal of plant [N(i)&(ii)(B)]
Operating profit
Less: Finance cost [N(iv)]
7,200.00
Profit before tax
119,200.00 Less: Tax [N(v)]
Profit after tax

Other comprehensive income

Less: Revaluation loss on leasehold property [N(i)&(ii)(A)]
Total other comprehensive income

- 17,180.00 TOTAL COMPREHENSIVE INCOME

102,020.00
- 4,500.00 B. STATEMENT OF FINANCIAL POSITION AS AT 31/12
97,520.00
ASSETS
NON-CURRENT ASSET
PPE [N(i)&(ii)(A)]
Intangible [N(i)&(ii)(A)]

CURRENT ASSET
Inventory
SSET - IAS 37 Trade receivables

TOTAL ASSETS
 EQUITY AND LIABILITIES
EQUITY
ies a low probability that the
re not probable that the event Stated capital (200m shares)
ull amount of the aclaimed Income surplus
e should be made in the notes Capital/Revaluation surplus
cial effects

NON-CURRENT LIABILITY
8% Preference share [N(iv)]
Deferred tax liability [N(v)]
hood is probable
CURRENT LIABILITY
Trade payables and provisons [N(iii)]
Current tax liability [N(v)]
Preference dividend accrued [N(iv)]
Bank overdraft

TOTAL EQUITY AND LIABILITY

7&9
easured at amorised cost

table)
Fixed Dividend due Year end
@ year-end 31-Dec
(D) (E) = (D) - (C)
1,200.00 20,600.00
R: EMMANUEL KWAMI A
 II FINAL ACCOUNTS TUTORIAL SET
OD IS LOVE PLC
FINANCIAL STATEMENTS FOR THE 2020 REPORTING PERIOD
FOR THE YEAR-ENDED 31/12/2020 STATEMENT OF CHANGES IN EQUITY FOR TH
GHC'000 GHC'000
297,500.00
- 221,180.00 Bal b/d as at 01/01/2020 (Opening balance)
76,320.00
- 21,900.00 Movements during the year
- 14,500.00 Net profit for the year
- 1,400.00 Dividend paid
- 1,500.00 - 39,300.00 loss on revaluation of leasehold property
37,020.00
- 2,000.00 Bal b/d as at 31/12/2020 (end of year balance)
35,020.00
- 11,600.00
23,420.00

- 4,500.00
- 4,500.00

18,920.00

SITION AS AT 31/12/2020
GHC'000 GHC'000

81,400.00
16,120.00 97,520.00

20,000.00
43,100.00 63,100.00

160,620.00
50,000.00
41,920.00
5,500.00 97,420.00

20,600.00
6,000.00 26,600.00

23,500.00
11,400.00
400.00
1,300.00 36,600.00

160,620.00
AMI AGBEVIVI (02428316
ORIAL SET

REPORTING PERIOD
OF CHANGES IN EQUITY FOR THE YEAR ENDED 31/12/2020
Ordinary share capital Income Surplus Capital reserve Total
GHC'000 GHC'000 GHC'000 GHC'000
50,000.00 24,500.00 10,000.00 84,500.00

- 23,420.00 - 23,420.00
- - 6,000.00 - - 6,000.00
- - - 4,500.00 - 4,500.00

50,000.00 41,920.00 5,500.00 97,420.00

242831612)
 D&A SOLUTION TO
IN
NOTES TO THE ACCOUNTS
(I) SALE OR RETURN BASIS - IFRS 15 (REVENUE RECOGNITION)
According to the revenue recognition criteria under IFRS 15, the sale or return transaction does not qualify to be fully
recognised as revenue in the books of accounts for the year ended 31/12/2020 as control has not been fully passed
on to the customer since they could return some of the goods. Value of goods which could be returned as at year-end
(31/12/2020) amounted to GHC 5.2m. This value is therefore going to be derecognised from revebue in accordance
with the IFRS 15 revenue recognition principles

Reversal of the revenue treatment on the sale or return transaction

Amount wrongly credited to revenue in the income statement (GHC'000) 5,200.00
CORRECTION OF ERROR - DOUBLE ENTRY DEBIT
GHC'000
Dr. Revenue 5,200.00
Cr. Trade recievables

Margin on company's sales 30%

Cost of the derecognised value of goods sold at GHC 5.2m 3,640.00

Reversal of the cost of sale (COS) treatment on the sale or return transaction
Amount wrongly debited to COS in the income statement (GHC'000) 3,640.00
CORRECTION OF ERROR - DOUBLE ENTRY DEBIT
GHC'000
Dr. Closing Inventory 3,640.00
Cr. Cost of Sales

(ii) NON-CURRENT ASSETS

A. PROPERTY, PLANT & EQUIPMENT (PPE) & INTANGIBLES Land Building
SCHEDULE - IAS 16 & IAS 38 GHC'000 GHC'000
Cost - -
Accumulated depreciation as at 01/01/2020 - -
Carrying value as at 01/01/2020 2,000.00 18,000.00
Additions
Add: Patent right (bought on 01/01/2020) - -
Total 2,000.00 18,000.00
Depreciation methods:
Building - remaining useful life after 2019 year-end valuation 18
Plant and Equipment (rate - Reducing balance)
Patent right (5 years expected useful life)

Less: Depreciation charge for the year - - 1,000.00

Carrying value as at 31/12/2020 2,000.00 17,000.00

Revaluation of Land and Building as at year-end, 31/12/2018 - IAS 16

Total Carrying Value of land and building as at 31/12/2020 19,000.00
Add: Revaluation gain on land and building 3,000.00
Fair value or restated value as at 31/12/2020 22,000.00

(B) Determining any impairment on P&E as at 31/12/2020 - IAS 36

Carrying Value of Plant and equipment as at 31/12/2020 14,000.00

Fair value less cost to sell as at 31/12/2020 14,200.00

Value in use as at 31/12/2020 13,500.00

According to IAS 36 (Impairment), impairment can only arise when the carrying
value of the asset is greater than the higher of the fair value less cost to sell or
value in use
The higher of the fair value less cost to sell or value in use 14,200.00

Therefore, no imparment adjustment would be required in respect of the Plant

and Equipment since the carrying value of the asset is lesser than the higher
of the fair value less cost to sell or value in use

(iii) FINANCIAL ASSET - IFRS 7 & 9 - Investment in a Fund

Measured at fair value through profit or loss, as per the question
GHC'000
Fair value as at 01/01/2020 5,000.00

The specified Market index link to fair value as at 01/01/2020 240.00

The specified Market index link to fair value as at 31/12/2020 259.20

Therefore, fair value as at year-end, 31/12/2020 5,400.00

Revaluation gain on equity investments for the 2020 to be included in the

400.00
profit or loss statement

(iv) FRAUD - IAS 8

 Overstatement of recievables to cover up theft of company's cash
Total theft up to year-end, 31/12/2020 6,000.00
Total theft up to 31/12/2019 2,000.00

Total theft from 31/12/2019 to 31/12/2020 to be expense in the

4,000.00
income statement as a loss

CORRECTION OF ERROR - DOUBLE ENTRY DEBIT CREDIT

GHC'000 GHC'000
Dr. Profit or loss statement 4,000.00
Dr. Income surplus (Prior period adjustment) 2,000.00
Cr. Trade recievables 6,000.00

(v) FINANCIAL INSTRUMENTS - IFRS 7 & 9

Issue of debenture stock is a financial liability and must be measured at amorised cost
Initial measurement at fair value 4,000.00
Loan coupon interest rate 20%
Annual coupon interest amount 800.00
Effective market yield 25%

Subsequent measurement (using the amortisation table)

Year Balance b/d Effective interest
Dates 1-Jan 01 - Jan to 31 - Dec
(A) (B)
2020 4,000.00 1,000.00
2021 4,200.00 1,050.00
2022 4,450.00 1,112.50

Finance cost on loan for the 2020 financial year 1,000.00

Loan financial liability as at 31/12/2020 4,200.00

(vi) INCOME TAX - IAS 12

GHC'000
The adjuested year-end current tax estimate for the reporting period not given -
Tax rate 25%
No overprovision or underprovision of tax from the Previous period -
Deferred tax liability at the previous year-end, 31/12/2019 3,000.00
Tax charged for the 2020 period 4,810.00

Taxable Temporary Difference (Taxable - since Asset's Carrying Value > Tax
16,000.00
Base; leading to Deferred tax liability ), excluding revaluation

Deferred tax liability as at 31/12/2020, excluding revaluation 4,000.00

Increase in deferred tax liability from 31/12/2019 to 31/12/2020, excluding
1,000.00
revaluation on building

The question implicates that deferred tax on revaluation should be ignored, since it states that
deferred tax movements should be sent to P/L only

Total deferred tax liability as at 31/12/2020 4,000.00

Computation of tax to be charged to the 2020 income statement

GHC'000
Year-end estimate of tax for the 2020 reporting period (Missing figure) 3,810.00
Add: Previous period under provision of current tax -
Less: Previous period over provision of current tax -
Add: Increase in deferred tax liability (excluding revaluation) 1,000.00
Less: Decrease in deferred tax liability (excluding revaluation) -
Tax charge for the period 4,810.00

D&A TUTOR: E
TION TO Q4 OF ACCT 302 FR II
IN THE BOOKS OF LIGHT
OUNTS
COGNITION)
does not qualify to be fully
has not been fully passed
be returned as at year-end
om revebue in accordance

ansaction

CREDIT
GHC'000

5,200.00

rn transaction

CREDIT
GHC'000

3,640.00

SSETS
P&E Intangibles Total
GHC'000 GHC'000 GHC'000
- -
- - -
16,000.00 - 36,000.00

- 2,000.00 2,000.00
16,000.00 2,000.00 38,000.00
 12.50%
5

- 2,000.00 - 400.00 - 3,400.00

14,000.00 1,600.00 34,600.00

S - IFRS 7 & 9
e measured at amorised cost

rtisation table)
Sub-total Coupon Interest Balance b/d
31-Dec 31-Dec 31-Dec
(C) = (A) + (B) (D) (E) = (D) - (C)
5,000.00 800.00 4,200.00
5,250.00 800.00 4,450.00
5,562.50 800.00 4,762.50
TOR: EMMANUEL KWAM
F ACCT 302 FR II FINAL ACCOUN
BOOKS OF LIGHT OF AFRICA LTD
FINANCIAL STATEMENTS FOR
COMPREHENSIVE INCOME STATEMENT FOR THE YEAR-ENDED 31/12/2020
GHC'000 GHC'000
Revenue [N(i)] 94,800.00
Less: Cost of sales {[N(i)] & [N(ii)(A)]} - 47,760.00
Gross profit 47,040.00
Less: Loss on Fraud [N(iv)] - 4,000.00
Less: Operating expenses - 23,200.00 - 27,200.00
Operating profit 19,840.00
Add: Revaluation gain on Financial Asset [N(iii)] 400.00
Less: Finance cost [[N(v)] - 1,000.00
Profit before tax 19,240.00
Less: Tax [N(vi)] - 4,810.00
Profit after tax 14,430.00

Other comprehensive income

Add: Revaluation gain on land and building [N(ii)(A)] 3,000.00
Total other comprehensive income 3,000.00

TOTAL COMPREHENSIVE INCOME 17,430.00

STATEMENT OF FINANCIAL POSITION AS AT 31/12/2020

GHC'000 GHC'000
ASSETS
NON-CURRENT ASSET
PPE [N(ii)(A)] 36,000.00
Intangibles - Patent [N(ii)(A)] 1,600.00
Financial Asset [N(iIi)] 5,400.00 43,000.00

ADJUSTED CURRENT ASSET

CURRENT ASSET (as per the question) 20,000.00
Inventory adjustment [N(i)] 3,640.00
Trade receivables adjustment {[N(i)] & [N(iv)]} - 11,200.00 12,440.00
TOTAL ASSETS 55,440.00

EQUITY AND LIABILITIES

EQUITY
Stated capital (4m shares @ GHC 2 per share) 8,000.00
Retained earnings 30,070.00
Capital/Revaluation surplus 3,000.00 41,070.00

NON-CURRENT LIABILITY
20% Debenture stock [N(v)] 4,200.00
Deferred tax liability [N(vi)] 4,000.00 8,200.00

CURRENT LIABILITY
Trade payables 2,360.00
Current tax liability [N(vi)] 3,810.00 6,170.00

TOTAL EQUITY AND LIABILITY 55,440.00

ANUEL KWAMI AGBEVIVI
ACCOUNTS TUTORIAL SET
RICA LTD
TEMENTS FOR THE 2020 REPORTING PERIOD
B. STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31/12/20
Ordinary share capital Retained earnings
GHC'000 GHC'000
Bal b/d as at 01/01/2020 (Opening balance) 8,000.00 30,000.00
Prior year adjustment on Fraud - - 2,000.00
Restated balance as at 01/01/2020 8,000.00 28,000.00

Movements during the year

Net profit for the year - 14,430.00
Dividend paid - - 12,360.00
Gain on revaluation of land and building - -

Bal b/d as at 31/12/2020 (end of year balance) 8,000.00 30,070.00

BEVIVI (0242831612)
ET

R ENDED 31/12/2020
Capital reserve Total
GHC'000 GHC'000
- 38,000.00
- - 2,000.00
- 36,000.00

- 14,430.00
- - 12,360.00
3,000.00 3,000.00

3,000.00 41,070.00
2)