QUESTION 21

Fanisi Limited, a listed company, has provided the following trial bala

Revenue
Purchases
Inventory as at 1 July 2022
Distribution Costs
Administration Expenses
Interest on Loanstock paid
Rent Income
Land and Buildings
Accumulated depreciation as at 1 July 2022
Plant and equipment
Accumulated depreciation as at 1 July 2022
Investment Property
Trade Receivables
Cash and Cash Equivalents
Ordinary Share Capital
Share Premium
Retained Earnings as at 1 July 2022
Dividends Paid
General Reserve
8% Loan stock
Trade Payables
Proceeds on sale of equipment

Further information to be taken into account:

1. Inventory is provided at Sh.97,000,000 at cost and Sh.95,250, 000
2. At the beginning of the year, Fanisi Limited disposed of some old
accumulated depreciation brought forward at 1 July 2022 of Sh.75
There were no other additions or disposals to property, plant and eq
3. The company classifies depreciation on plant and equipment as a c
Depreciation rates are as follows:
Buildings - Straight line over 50 years
Plant and equipment - 20% reducing balance

Fanisi Limited's accounting policy is to charge a full year's deprec

Fanisi Limited's land and buildings were eight years old as at 1 Ju
4. On 30 June 2023, the company revalued its land and buildings to S
follows the revaluation model of IAS 16 for its land and buildings
the revaluation surplus as being realised on disposal of the assets.

5. Expected credit loss (an administration expense) is on average 10%

6. The income tax charge (current and deferred tax) for the year is es
payable tax on the revaluation of land and buildings to be charged

7. On 1 January 2023, Fanisi Limited made a 1 for 4 bonus issue, cap

This transaction had not yet been accounted for. The fair value of

8. Fanisi Limited uses the fair value model of IAS 40. The fair value

Required:
As per IAS 1:

(i) Statement of Profit or Loss and other comprehensive incomes

(ii) Statement of changes in Equtity for the year ended 30 June 20
(iii) Statement of financial position as at 30 June 2023.
 SECTION II (60 MARKS)

owing trial balance as at 30 June 2023.

Sh."000" Sh."000"
662,000.00
417,000.00
111,000.00
128,000.00
86,500.00
1,500.00
12,000.00
210,000.00
30,000.00
64,500.00
31,500.00
137,000.00
130,000.00
8,000.00
25,000.00
 61,000.00
188,250.00
6,500.00
142,500.00
37,500.00
108,500.00
1,750.00
1,300,000.00 1,300,000.00

closing closing
Sh.95,250, 000 at net realisable value.
ed of some old equipment for Sh.1,750,000. The equipment had cost Sh.3,75
y 2022 of Sh.750,000.
rty, plant and equipment in the year.
equipment as a cost of sale and on land and buildings as an administrative cos

ull year's depreciation in the year of an asset's purchase and none in the year o
rs old as at 1 July 2022.
nd buildings to Sh.190,000,000 (including Sh.2,500,000 for the land). The co
nd and buildings, but no revaluations had been carried out. The company wish
al of the assets.

s on average 10% of the trade receivables.

for the year is estimated at Sh.11,250,000 (of which Sh.4,250,000 relates to fu
gs to be charged to other comprehensive income (and the revaluation surplus)
4250defered tax NCl

bonus issue, capitalising its general reserve.

he fair value of the company's shares on the date of the bonus issue was Sh.3

0. The fair value of the investment property as at 30 June 2023 was Sh.147,00

ensive incomes for year ended 30 June 2023.

nded 30 June 2023.
 180,000.00 bulding
3,750.00 value of land

buildings
*3750*50 187,500.00
acc dep 33750
nbv 153,750.00
rev 11250
NBV 153,750.00
Plant and equipment
 20% on reducing basis
revelaution
acqusition
6250
3,000.00

ITS SHOULD BAL

CR IS
DR SOFP
lower
ment had cost Sh.3,750, 000 and had

an administrative cost.

450

and none in the year of disposal.

3750every year
0 for the land). The company
ut. The company wishes to treat

13,000.00
4,250,000 relates to future
he revaluation surplus).
7000SOFP

bonus issue was Sh.37.50 per share.

e 2023 was Sh.147,000,000.

(10,000.00)
190000
2500
187500
187500
22,500.00
210000-1875000
land
22,500.00 210,000.00 to
33,750.00
22,500.00 176,250.00
2,500.00 13,750.00 OCI
25,000.00 190,000.00
13,750.00
162,500.00

UU
 OCI

117,000.00 SOFP

1/4* no of shares * par value

6250Dr. General reserve
6250Cr Osc
(Total: 30 marks)

CF36P page 6
Out of 10
 30,000
equipment nbv
bal b/d 33,000 disposal
dep
bal c/d PPE
33,000
reducing dep cost-acc dep- acc dep on disposal

acc dep
disposed 750 bal b/d

land and building

bal b/d 180,000 dep
revaluation land 2,500
Rev on building 11,250 bal c/d
193750

acc dep
disposed 750 bal b/d

Equipment a
bal b/d 3,750 DISPOSED
ACC, DEPRECIATION
disposal 750 bal b/d
IS
750 -

cost-accumulated dep COS

3,750
750
NBV 3,000
Proceeds 1,750
IS 1,250

Disposal of equipment
Equipment 3,750 acc dep
GAIN bank
IS
3,750 LOSS
 3,000
6,000
24,000
33,000
n disposal

31,500 INCREASE
DECREASE

3,750 3750

190,000 NBV 214,000

193750
31,500

3,750

750
-
750
other
Investment income
Gain on investment
Financial asset fair value
gain on investment property
Gain on financial asset at fair va
through profit or loss

750
1,750
1,250
3,750
EXP
LOSS
ment income
n investment
al asset fair value
investment property
n financial asset at fair value
h profit or loss
Statement of comprehensive income

closing inventory
Loss on disposal of Equipment
Depreciation of plant and equipment
Depreciation of land and building
Revaluation of land and buildings
Deferred tax
Rev gain on investment property
increase in provision for bad debts
interes on loan stock
rent income
Purchases
Opening inventory

Total
 Fanisi Limited
Statement of Profit or Loss and other comprehensive inco
for year ended 30 June 2023.

Revenue
COS
Gross Profit
other income
Rev gain on investment property
Rent income

Expenses
distribution cost
Administrative cost
finance cost
Other expenses
PBT
Current tax
PAT

OCI
Revaluation gain on land
Revaluation gain on building
Deffered tax expenses
Total comprehensive income

(ii) Statement of changes in Equtity for the year ended 30 Ju

bal b/d
Bonus issues
dividend paid
profit for the year
net of OCI
bal c/d
Non current Assets
PPE
investment propery

Current Assets
inventory
Trade receivables
cash
Total current assets
Total assets

financed by equity and liabilities

OSC
Share premium
General reserves
R/E
Revaluation reserves
Total Equity
Non current liabilities
8% loan stock
deffered tax liability
Total non currrent liabilities

Current liabilities
Trade payables
current tax
interest payable
total current liabilites
Total liabilites
Total Equity and liabilities
Revenue COS
Sh."000" Sh."000"
(95,250)
1,250
6,000

417,000
111,000

440,000
d other comprehensive incomes

Sh."000" Sh."000"
662,000
(440,000)
222,000

10,000
12,000
244,000

(128,000)
(103,250)
(3,000)

9,750
(7,000)
 2,750

2,500
11,250
(4,250)
12,250

qutity for the year ended 30 June 2023.

OSC Share premium

25,000.00 61,000
6250

31,250.00 61,000.00

Fanisi ltd
statement of financial position
as at
Sh."000" Sh."000"

214,000
147,000
361,000

95,250
117,000
8,000
220,250
581,250

31,250
61,000
139,000
181,750
9,500
422,500
 37,500
4,250
41,750

108,500
7,000
1,500
117,000
158,750
581,250
other income Distribution cost
Sh."000" Sh."000"

10000

12000

22,000.00 -
 a loss is a tax credit
deferred tax asset

General reserves R/E

142,500.00 188,250.00
-6250
-6500
2750

139,000.00 181,750.00
Finance cost adm
Sh."000" Sh."000"

3750

13000
3000

3,000.00 16,750.00
86500
103,250.00
15% redeemable pref share
dividends
dividend payable
finance cost

irredeeamable pref shares

:1/4*no of shares* par value

paid
not

Revaluation
reserves Total
416,750.00
-
- 6,500.00
2,750.00
9500 9,500.00
9,500.00 422,500.00
OCI
Sh."000"

13,750
(4,250.00)

9,500.00
60,000.00
9,000.00
The following trial balance was extracted from the books of Kim

Ordinary share capital

Share premium
Revaluation reserve (1 November 2022)
Retained earnings (1 November 2022)
Revenue
Purchases
Production costs
Administrative expenses
Distribution cost
Interest on loan
Research and development
Land and building at valuation (1 Novembe
Equipment property
Investment at cost at valuation (1 November 2022)

Accumulated depreciation (1 November 2022):

Building
Equipment
Intangible assets at cost
Accumulated amortisation (1 November 2022)
Inventory (1 November 2022)
Bank balance
Trade receivables
trade payables
10% bank loan long term
Interim dividends paid
Corporate tax payable

Additional information:
1. Inventory as at 31 October 2023 was valued at Sh.130,000,00
included in this value with a cost of Sh.14,000,000 were sold fo
2. Kima Ltd. took out the bank loan of Sh.2,000,000,000 on 1 N
annual installments. The interest rate on the loan is 10% per ann
3. The corporation tax for the previous year was paid during the
31 October 2023 was Sh.1,250,000,000.
4. The directors have discovered that a customer who owed Sh.
5. Included in the revenue is a grant from the government of Sh
employ additional youth in the next financial year.
6. Research and development expenditure comprised of:
• Sh.160,000,000 on general research.
• Sh.134,000,000 on developing new technology. At the end
• Sh.646,000,000 on development of new production technol
7. Intangible assets at cost relate to a development that was bein
8. The Sh.3,400,000,000 relating to land and building is based o
the start of the year. The remaining useful life was 20 years as a
9. As at 31 October 2023, the values were as follows:
• Land Sh.2,500,000,000
• Building Sh.1,140,000,000
10. Equipment is depreciated on straight line basis over 5 years
• 50% on production.
• 25% in the administrative functions.
• 25% in the distribution functions.
11. As at 31 October 2023, investment property was valued at
Required:
(a) A statement of comprehensive income for the year ended 31
(b) Statement of financial position as at 30 October 2023. (10 m

cost
Acc dep

depreciation
NBV
31 oct 23
Land
Revaluation gain

Rev by

1 nov 2022
31Nov 2023
acted from the books of Kima Ltd., a manufacturing company as at 31

Sh.“000” Sh.“000”

2,500,000
500,000
600,000
3,570,000
17,400,000
3,000,000
2,400,000
1,960,000
740,000
100,000
940,000 646 minus
3,400,000
9,000,000
4,400,000
ber 2022):
800,000
900,000
1,000,000
ber 2022) 100,000
 100,000
800,000
700,000
800,000
2,000,000
700,000
70,000
29,240,000 29,240,000

was valued at Sh.130,000,000, but it was subsequently discovered that g

Sh.14,000,000 were sold for Sh.4,000,000.
of Sh.2,000,000,000 on 1 November 2022 which is repayable in four e
on the loan is 10% per annum payable semi-annually.
us year was paid during the current year. The corporation tax for the ye

a customer who owed Sh.250,000,000 as at year end was declared ban

from the government of Sh.300,000,000 that Kima Ltd. received for ac
inancial year.
diture comprised of:
normal expenses
ew technology. At the end of the year the directors did not have confid
of new production technology. The development is almost complete a
development that was being amortised over a useful life of 10 years. A
and and building is based on last year’s valuation and includes land at
seful life was 20 years as at 1 November 2022.
were as follows:

ight line basis over 5 years. Kima Ltd. estimated that the equipment is
cost
adm
distr
ent property was valued at Sh. 5,000,000,000 and the company policy i

come for the year ended 31 October 2023. (10 marks)

s at 30 October 2023. (10 marks)

340,000,000

land Building
2,000,000 1,400,000
800,000
2,000,000 600,000
Oct 2023
- 30,000
2,000,000 570,000
 2,500,000 1,140,000
500,000 570,000

Investment Property
Cost 4,400,000
Fv investment 5,000,000
600,000
ng company as at 31 October 2023:

intangible

646 capitalize
ntly discovered that goods

s repayable in four equal

oration tax for the year ended

end was declared bankrupt.

a Ltd. received for accepting to

s did not have confidence that the development will be successful.

is almost complete and the directors are highly confident that the techn
ful life of 10 years. As at 1 November 2022, this was reviewed and wa
and includes land at a valuation of Sh.2,000,000,000 and has an indefi
hat the equipment is used in the business on the following basis:
900,000
450,000
450,000
the company policy is to use fair value on investment valuation.

Equipment Total
9,000,000 12,400,000
900,000 1,700,000
8,100,000 10,700,000
-
1,800,000 1,830,000 depreciation expen
6,300,000 8,870,000
 -
-
6,300,000 9,940,000
1,070,000 OCI

INVESTMENT PROPERY

SOFP
 write off
ill be successful.
nfident that the technology would result in significant cost savings.
was reviewed and was then assessed as having a remaining useful life o
00 and has an indefinite useful life. The building should be depreciate
llowing basis:

ent valuation.

depreciation expense
INTANGIBLE ASSETS
Revenue

COS
Opening stock
Purchases
return outward
Carriage inward
gain/loss on asset disposal
dep land building

Revenue
COS
Administrative
Distribution
Financecost
OCI
would result in significant cost savings.
assessed as having a remaining useful life of 6 years.
eful life. The building should be depreciated on the value at
Administrative exp
salaries
rent
Electrity ulitities
Rent.
Utilities.
Insurance.
Executives wages and benefits.
The depreciation on office fixtures
Legal counsel and accounting staff salaries.
Office supplies.
savings.
useful life of 6 years.
e depreciated on the value at
NCL
 distribution
MV. Expense
bad dents
Freight Cost. ...
#2 – Storage Cost. ...
#3 – Product Handling Cost. ...
#4 – Direct Selling Expenses. ...
#5 – Advertisement Expenses. ...
#6 – Managerial Personnel Cost.
staff salaries.

(6,574,000)

W1
 NRV

W1
annual instalment

NCL

interest
interest on loan
bank
Interest payable
Dr
CR

W4
Bad debts written off
Trade receivables

W5

Deffered income

Dr
Cr

W6

Amortization
anortization
bal b.d
bank
 anortization

NBV = COST- ACC DEP

finance cost OCI
interest on loand investment propert
dividends on redeemable

NRV COST
 T

130,000
(14,000) LOWER OF<
116,000
4,000 DR
120,000 SOFP
120,000

2,000,000 long term

500,000 Short liabilites

1,500,000

200,000
Dr(IS) 200,000
CR
CR

W3
 Tax expenses
Tax expenses 1,250,000,000
tax payable

Dr Cr
250,000,000
250,000,000

revenue 300,000,000
GVT Grant

150,000
anortization
1,000,000
646,000
1,646,000
anortization
bal b/d
IS

1,396,000
The total expenses associated with

REVENUE
COS
Opening inventory
Purchase
deprecation closing stock
amortization GP
devepment cost
OCI

OPERATING EXPENSES
Administrative expense
 distribution
finance cost

tax expenses

CR

IS

dr
cr

100,000
100,000
1,250,000,000

300,000,000
100,000
150,000
ated with securing funds for a project or

17,100,000

100,000
3,000,000
120,000 (6,574,000)
10,526,000

600,000
11,126,000
project or business arrangement may in
t may include interest payments, financ
, financing fees charged by intermediar
mediary financial institution, and fees o
d fees or salaries of any personnel requ
el required to complete the financing pr
ncing process.
Answer BOTH questions in this Section.

QUESTION 21
Fanisi Limited, a listed company, has provided the following trial bala

Sh."000"
Revenue
Purchases 417,000.00
Inventory as at 1 July 2022 111,000.00
Distribution Costs 128,000.00
Administration Expenses 86,500.00
Interest on Loanstock paid 1,500.00
Rent Income
Land and Buildings 210,000.00
Accumulated depreciation as at 1 July 2022
Plant and equipment 64,500.00
Accumulated depreciation as at 1 July 2022
Investment Property 137,000.00
Trade Receivables 130,000.00
Cash and Cash Equivalents 8,000.00
Ordinary Share Capital
Share Premium
Retained Earnings as at 1 July 2022
Dividends Paid 6,500.00
General Reserve
8% Loan stock
Trade Payables
Proceeds on sale of equipment
1,300,000.00

Further information to be taken into account:

1. Inventory is provided at Sh.97,000,000 at cost and Sh.95,250, 000
2. At the beginning of the year, Fanisi Limited disposed of some old
accumulated depreciation brought forward at 1 July 2022 of Sh.75
There were no other additions or disposals to property, plant and eq
3. The company classifies depreciation on plant and equipment as a c
Depreciation rates are as follows:
Buildings - Straight line over 50 years
Plant and equipment - 20% reducing balance

Fanisi Limited's accounting policy is to charge a full year's deprec

Fanisi Limited's land and buildings were eight years old as at 1 Ju

4. On 30 June 2023, the company revalued its land and buildings to S

follows the revaluation model of IAS 16 for its land and buildings

the revaluation surplus as being realised on disposal of the assets.

5. Expected credit loss (an administration expense) is on average 10%

6. The income tax charge (current and deferred tax) for the year is es
payable tax on the revaluation of land and buildings to be charged
7. On 1 January 2023, Fanisi Limited made a 1 for 4 bonus issue, cap
This transaction had not yet been accounted for. The fair value of

8. Fanisi Limited uses the fair value model of IAS 40. The fair value

Required:
As per IAS 1:

(i) Statement of Profit or Loss and other comprehensive incomes

(ii) Statement of changes in Equtity for the year ended 30 June 20
(iii) Statement of financial position as at 30 June 2023.
 SECTION II (60 MARKS)

owing trial balance as at 30 June 2023.

Sh."000"
662,000.00 return in wards
IS
IS
IS
IS
SOFP
12,000.00 IS
SOFP
30,000.00 SOFP
SOFP
31,500.00 SOFP
SOFP
SOFP
SOFP
25,000.00
61,000.00
188,250.00 R/E B/F

142,500.00
 37,500.00 3,000.00
108,500.00
1,750.00
1,300,000.00

Sh.95,250, 000 at net realisable value.

ed of some old equipment for Sh.1,750,000. The equipment had cost Sh.3,750
y 2022 of Sh.750,000.
ty, plant and equipment in the year.
quipment as a cost of sale and on land and buildings as an administrative cost

ull year's depreciation in the year of an asset's purchase and none in the year o
rs old as at 1 July 2022. 3750

nd buildings to Sh.190,000,000 (including Sh.2,500,000 for the land). The com

d and buildings, but no revaluations had been carried out. The company wish

al of the assets.

on average 10% of the trade receivables.

or the year is estimated at Sh.11,250,000 (of which Sh.4,250,000 relates to fu
s to be charged to other comprehensive income (and the revaluation surplus)
 7000
bonus issue, capitalising its general reserve.
he fair value of the company's shares on the date of the bonus issue was Sh.37

. The fair value of the investment property as at 30 June 2023 was Sh.147,00

ensive incomes for year ended 30 June 2023.

ded 30 June 2023.
REV GAIN 10,000.00
13,000.00 117,000.00

22,800.00
 lower of
pment had cost Sh.3,750, 000 and had

as an administrative cost.

450

e and none in the year of disposal.

00 for the land). The company

out. The company wishes to treat

OCI

h.4,250,000 relates to future

the revaluation surplus).
e bonus issue was Sh.37.50 per share.

ne 2023 was Sh.147,000,000.

(Total: 30 marks)

CF36P page 6
Out of 10
 COST OF SALES
disposal loss of plant and equipment and machinery
Depreciation on plant, equipment and machinery

WORKINGS

W1 Inventory valuation
value inventory at lower of Cost and NBV
cost
NRV
lower

W2 Disposal of Equipment
cost
A Acc. Dep
NBV
Disposal proceeds
disposal loss of equipment

W3 Depreciation
 Depreciation on buildings
Depreciation on plant
20% reducing balance

W4 New value of land and building (Rev)

NBV
Revaluation of gain on land and building

PROVISION FOR BAD DEBTS

W5 expected credit loss

trade receivable

W6 Tax account

tax liability

TAX PAID
W7 bonus issue
bonus is issued at par value
par value

bonus

w8 Investent property
new value
NBV
Fair value

COST OF SALE
opening stock
Add purchases
less closing stock
add disposal of plant and equipment
depreciation of plant and equipment
administrative expense
Trial
dep on bulding
expected credit loss

PPE
ment and machinery ADMIN
nt and machinery GENERAL
Depreciation on building
expected loss

t and NBV
97,000
95,250
95,250 closing stock

3750incase of a gain disposal add it to other comprehensi

750Fair value adjustments
3000
1750
1250

6,000.00 4,200.00
 adm 4,200.00 3,750.00
COS 6,000.00

(Rev) 190,000 175,800.00

175,800
d building 14,200 *Dr land and builind
OCI *CR deffered tax account
*Cr Revaluation reserc

admi 161,600.00
13,000.00
117,000.00

Income tax account

11250deffered tax 4250

IS(current tax) 7000

11250 11250
1/4
1 sh 25,000.00 issue of shares increase OSC and d

6,250.00 Dr Osc DR general reserves

CR General reservCR…...OSC

147,000
137,000
10,000 OCI

111,000.00
417,000.00
(95,250)net realisable
1250
6,000.00
440,000.00
builsings ID
86,500.00
4,200.00
13000
103,700.00 cost
acc
disposal
190000 dep
24,000.00
214000
 selling and distribuition
sales commision
MV expenses
advertising

er comprehensive income

depreciation on building
credit loss
 14,200
4,250
9,950

SOFP

SOFP
ease OSC and decrease
Finance cost
Interest expense

Fanisi Limited
Statement of comprehensive of profit and loss
for the year ended 3oth june 2023
Sh."000"
Revenue
COS -440000
Gross Profit

other income
Rent
discouunt received

Expenses
Administrative 103,700.00
selling and distribution 128,000.00
finance cost 3,000.00
PBT
Less tax charged
loss after tax

other comprehensive inceome

Revaluation gain on land
Deferred tax effect on revaluation
Fair value gain on investment property
Total Comprehensive income

for th
Ordinary share capit
Sh."000"
Bal b/d 25,000.00
Bonus Issue of share 6,250.00
Loss after tax

Dividends paid
Revalaution surplus on land
fair value gain on investment propert
deferred tax effect on revaluation of land
Total 31,250.00
 Sh."000"
Non current assets
PPE
Investment Property

Current Assets
Inventory 95,250
Trade Receivables 117,000
Cash and Cash Equivalents 8,000

Total assets
Equity& Liabilities
Ordinary share capital
Share Premium
R/E
Gen, reserves
Rev Reserve
Fair value
Total Equity
Non current liabilities
8% loan stock
Defered tax

Current liabilites
Trade payables 108,500
Interest payable 1,500
Current tax 7,000
Total Equity and Liabilities
fit and loss
2023
Sh."000"
662,000
(440,000)
222,000

12,000
234,000

(234,700)
 (700)
(7,000)
(7,700)

14,200
(4,250)
10,000
12,250

Fanisi Limited
Statement of changes in equity
for the year ended 30th june 2023
Share Premium R/E
Sh."000" Sh."000"
61,000 188,250.00

(7,700)

- 6,500.00

61,000.00 174,050.00
 Fanisi Limited
Statement of financial Position
for the year ended 30th June 2023
Sh."000"

214,000
147,000

220,250

581,250

31,250.00
61,000.00
174,050.00
136,250.00
9,950.00
10,000.00
422,500.00
 37,500
4,250

117,000
581,250
uity

Gen, reserves Rev Reserve Fair value

Sh."000" Sh."000"
142,500.00
(6,250.00)

14,200
10,000
-4250
136,250.00 9,950.00 10,000.00
osition
une 2023
Totals
Sh."000"
416,750.00
-
- 7,700.00

- 6,500.00
14,200.00
10,000.00
- 4,250.00
422,500.00
Fanisi Limited, a listed company, has provided the following trial balance as a

Sh."000"
Revenue
Purchases 417,000.00
Inventory as at 1 July 2022 111,000.00
Distribution Costs 128,000.00
Administration Expenses 86,500.00
Interest on Loanstock paid 1,500.00
Rent Income
Land and Buildings 210,000.00
Accumulated depreciation as at 1 July 2022
Plant and equipment 64,500.00
Accumulated depreciation as at 1 July 2022
Investment Property 137,000.00
Trade Receivables 130,000.00
Cash and Cash Equivalents 8,000.00
Ordinary Share Capital
Share Premium
Retained Earnings as at 1 July 2022
Dividends Paid 6,500.00
General Reserve
8% Loan stock
Trade Payables
Proceeds on sale of equipment
 1,300,000.00

Further information to be taken into account:

1. Inventory is provided at Sh.97,000,000 at cost and Sh.95,250, 000 at net re
2. At the beginning of the year, Fanisi Limited disposed of some old equipme
accumulated depreciation brought forward at 1 July 2022 of Sh.750,000.
There were no other additions or disposals to property, plant and equipmen
3. The company classifies depreciation on plant and equipment as a cost of sa
Depreciation rates are as follows:
Buildings - Straight line over 50 years
Plant and equipment - 20% reducing balance

Fanisi Limited's accounting policy is to charge a full year's depreciation in

Fanisi Limited's land and buildings were eight years old as at 1 July 2022.

4. On 30 June 2023, the company revalued its land and buildings to Sh.190,0
follows the revaluation model of IAS 16 for its land and buildings, but no
the revaluation surplus as being realised on disposal of the assets.

5. Expected credit loss (an administration expense) is on average 10% of the

6. The income tax charge (current and deferred tax) for the year is estimated
payable tax on the revaluation of land and buildings to be charged to other

7. On 1 January 2023, Fanisi Limited made a 1 for 4 bonus issue, capitalisin

This transaction had not yet been accounted for. The fair value of the com

8. Fanisi Limited uses the fair value model of IAS 40. The fair value of the i

Required:
As per IAS 1:

(i) Statement of Profit or Loss and other comprehensive incomes for year
(ii) Statement of changes in Equtity for the year ended 30 June 2023.
(iii) Statement of financial position as at 30 June 2023.
 SECTION II (60 MARKS)

trial balance as at 30 June 2023.

Sh."000"
662,000.00
IS
IS
IS
IS
SOFP
12,000.00

30,000.00

31,500.00

25,000.00
61,000.00
188,250.00

142,500.00
37,500.00
108,500.00
1,750.00
 1,300,000.00

dep at disposal
250, 000 at net realisable value.
ome old equipment for Sh.1,750,000. The equipment had cost Sh.3,750, 000 and had
of Sh.750,000.
nt and equipment in the year.
ent as a cost of sale and on land and buildings as an administrative cost.

r's depreciation in the year of an asset's purchase and none in the year of disposal.
as at 1 July 2022.

dings to Sh.190,000,000 (including Sh.2,500,000 for the land). The company

buildings, but no revaluations had been carried out. The company wishes to treat
he assets.

erage 10% of the trade receivables.

year is estimated at Sh.11,250,000 (of which Sh.4,250,000 relates to future
e charged to other comprehensive income (and the revaluation surplus).

issue, capitalising its general reserve.

value of the company's shares on the date of the bonus issue was Sh.37.50 per share.

fair value of the investment property as at 30 June 2023 was Sh.147,000,000.

 incomes for year ended 30 June 2023.
0 June 2023.
8% loan stock
3,000

closing stock
NRV 95,250

cost 3,750
acc dep 750
3,000
proceed 1,750
loss on disp 1,250
 Plant and equipment
bal b/d 33,000 disposal
dep
bal c/d
,750, 000 and had 33,000

land and building

bal b/d 180,000 DEP

Rev on land 2,500

ar of disposal. Rev on build 11,250

bal c/d
193,750
company
wishes to treat
130,000
Trade receivables 13,000
117,000
o future
income tax charge 11,250
deferred tax 4,250
tax expenses for the year 7,000
h.37.50 per share.
bonus issues
,000,000. ;1/4

6,250 osc
 general reserve

value of investment property

 Revenue
Closing inventory NRL
Loss on equipment disposal
Depreciation on equipment
depreciation on land & buildings
Rev on land
Rev on buldings
Expected credit loss
finance expenses
inventory
purchases
rent income
rev gain on investment property

-
 3,000
6,000
24,000 SOFP
33,000

3,750

190,000 SOFP
193,750

sofp
ral reserve

property
147,000 sofp
COS adm other income
(95,250.00)
1,250.00
6,000.00
3,750.00

13,000.00

111,000.00
417,000.00
12,000.00
10,000.00

440,000.00 16,750.00 22,000.00

Fanisi Ltd
Statement of Profit or Loss and other comprehensive incomes
for year ended 30 June 2023.
Sh."000" Sh."000"
Revenue 662,000.00
COS (440,000.00)
Gross profit 222,000.00

Other income 22,000.00

244,000.00
Expenses
Adm 103,250.00
Distribution cost 128,000.00
Finance cost 3,000.00 (234,250.00)
PBT 9,750.00
Income tax expenses (7,000.00)
PAT 2,750.00

OCI 9,500.00
Total comprehensive income 12,250.00
finance cost OCL

2,500.00
11,250.00
(4,250.00)
3,000.00

3,000.00 9,500.00
Fanisi Limited, a listed company, has provided the following trial balance as at 30 June 2023.

Sh."000"
Revenue
Purchases 417,000.00
Inventory as at 1 July 2022 111,000.00
Distribution Costs 128,000.00
Administration Expenses 86,500.00
Interest on Loanstock paid 1,500.00
Rent Income
Land and Buildings 210,000.00
Accumulated depreciation as at 1 July 2022
Plant and equipment 64,500.00
Accumulated depreciation as at 1 July 2022
Investment Property 137,000.00
Trade Receivables 130,000.00
Cash and Cash Equivalents 8,000.00
Ordinary Share Capital
Share Premium
Retained Earnings as at 1 July 2022
Dividends Paid 6,500.00
General Reserve
8% Loan stock
Trade Payables
Proceeds on sale of equipment
1,300,000.00

Further information to be taken into account:

1. Inventory is provided at Sh.97,000,000 at cost and Sh.95,250, 000 at net realisable value.
2. At the beginning of the year, Fanisi Limited disposed of some old equipment for Sh.1,750,000. The equipment ha
accumulated depreciation brought forward at 1 July 2022 of Sh.750,000.
There were no other additions or disposals to property, plant and equipment in the year.
3. The company classifies depreciation on plant and equipment as a cost of sale and on land and buildings as an adm
Depreciation rates are as follows:
Buildings - Straight line over 50 years
Plant and equipment - 20% reducing balance

Fanisi Limited's accounting policy is to charge a full year's depreciation in the year of an asset's purchase and non
 Fanisi Limited's land and buildings were eight years old as at 1 July 2022.

4. On 30 June 2023, the company revalued its land and buildings to Sh.190,000,000 (including Sh.2,500,000 for the
follows the revaluation model of IAS 16 for its land and buildings, but no revaluations had been carried out. The
the revaluation surplus as being realised on disposal of the assets.

5. Expected credit loss (an administration expense) is on average 10% of the trade receivables.
6. The income tax charge (current and deferred tax) for the year is estimated at Sh.11,250,000 (of which Sh.4,250,0
payable tax on the revaluation of land and buildings to be charged to other comprehensive income (and the revalu

7. On 1 January 2023, Fanisi Limited made a 1 for 4 bonus issue, capitalising its general reserve.
This transaction had not yet been accounted for. The fair value of the company's shares on the date of the bonus i

8. Fanisi Limited uses the fair value model of IAS 40. The fair value of the investment property as at 30 June 2023

Required:
As per IAS 1:

(i) Statement of Profit or Loss and other comprehensive incomes for year ended 30 June 2023.
(ii) Statement of changes in Equtity for the year ended 30 June 2023.
(iii) Statement of financial position as at 30 June 2023.
 SECTION II (60 MARKS)

Sh."000"
662,000.00
IS
IS
IS
IS
SOFP
12,000.00

30,000.00

31,500.00

25,000.00
61,000.00
188,250.00

142,500.00
37,500.00
108,500.00
1,750.00
1,300,000.00

Equipment disposal
cost 3,750
0,000. The equipment had cost Sh.3,750, 000 and had acc. Dep 3,000
proceeds 1,750
loss on disposal 1,250
d and buildings as an administrative cost. Equipment a/c
bal 33,000
8

33,000
n asset's purchase and none in the year of disposal.
 Building & land
ding Sh.2,500,000 for the land). The company bal 180,000
had been carried out. The company wishes to treat rev on land 2,500
Rev on building 11,250
193,750
13,000 117,000
000 (of which Sh.4,250,000 relates to future total tax 11,250
ve income (and the revaluation surplus). deffered tax 4,250
7,000
1/4*25000 osc
on the date of the bonus issue was Sh.37.50 per share. General reserves

perty as at 30 June 2023 was Sh.147,000,000. investment propert

cost 137,000
fair value 147,000
gain 10,000
 Revenue
revenue 662,000
Closing inventory
loss on Equipment disposal
Dep on Equipment
Depreciation on land
Revaluation on land
Revaluation on buildings
Expected credit loss
Rev gain on investment property
Rent income
deferred income
8% Loan stock
Inventory as at 1 July 2022
Purchases
Total 662,000

Fa
Statement of Profit or Loss a
for year end

Revenue
COS
Gross Profit
othe incomes
Rev gain on investment property
Rent income

Expenses
adm
distribution
Finacne cost
PBT
Tax expenses
disposal 3,000 PAT
dep 6,000 OCI
bal c.d 24,000 SOFP Revaluation on land
- 33,000 Revaluation on buildings
Deffered tax income
 Total comprehensive income

dep 3,750

bal c/d 190,000 sofp changes in Equity

- 193,750

Bal b/d
Dividends paid
profit for the year
6,250 bonus issues
6,250 Revaluation on land
Revaluation on buildings
Deffered tax income
total
 cos other income adm distribution

(95,250)
1,250
6,000
3,750

13,000
10,000
12,000

111,000
417,000
440,000 22,000 16,750 -

Fanisi Ltd
ment of Profit or Loss and other comprehensive incomes.
for year ended 30 June 2023.
Sh."000" Sh."000"
662,000
(440,000)
222,000

vestment property 10,000

12,000
244,000

(103,250)
(128,000)
(3,000)
9,750
(7,000)
2,750

2,500
n buildings 11,250
(4,250)
ensive income 12,250

Ordinary Share Capital Share Premium Retained Earnings General Reserve

Sh."000" Sh."000" Sh."000" Sh."000"
25,000.00 61,000.00 188,250.00 142,500.00
(6,500)
2,750
6,250 (6,250)

n buildings

31,250 61,000 184,500 136,250

Fanisi Ltd
Statement of financial position
As at 30 June 2023.
Sh."000" Sh."000"
Non Current Assets
PPE 214,000
Investment property 147,000

Current Assets
Inventory 95,250
Trade receivables 117,000
cash 8,000
Total Assets 581,250

financed by
Ordinary Share Capital 31,250
Share Premium 61,000
Retained Earnings 184,500
General Reserve 136,250
Revaluation 9,500
Total Equity 422,500
Non current liabilities
8% Loan stock 37,500
deffere tax liability 4,250
Current liabilities
Trade Payables 108,500 -
current tax 7,000
Interest payable 1,500
Total liabilities 158,750
Total Equity and Liabilities 581,250
Finacne cost OCI

2,500
11,250

(4,250)
3,000

3,000 9,500
Revaluation Totals
Sh."000"
416,750
(6,500)
2,750
-
2,500 2,500
11,250 11,250
(4,250) (4,250)
9,500 422,500