The financial director of St Kitts Limited is in the process of finalizing the financial statements

The financial director of St Kitts Limited is in the process of finalizing the financial statements for the year ended 28 February 20X7. The trial balance at that date is as follows:

ST KITTS LIMITEDTRIAL BALANCE AT 28 FEBRUARY 20X7

 

Debit

Credit

Ordinary share capital

 

3 000 000

Share premium

 

1500 000

Distributable reserves

 

1 424 200

Borrowings

 

2 000 000

Accounts payable

 

400 000

Accrued expenses

 

20 000

Property, plant and equipment

4 200 000

 

Accounts receivable

1 100 000

 

Accrued income

15 000

 

Inventory

1 800 000

 

Tax Refundable

200 000

 

Cash at bank

2 059 200

 

Revenue

7 100 000

 

Cost of sales

3 480 000

 

Net operating expenses

240 000

 

Interest on borrowings

150000

 

Share issue expenses

20 344 200

20 344 200

The following information is relevant:

• The authorised share capital comprises 10 000 000 ordinary shares of CO.50 each. During the year, 1000 000 shares were issued at a price of C2.00. The issue of the shares has been correctly recorded in the accounting records. Share issue expenses of C150 000 were paid. The financial director wishes to account for these expenses with the minimumimpact on distributable reserves.

• The borrowings relate to a loan taken out by St Kitts Limited on 1 July 20X4 for a three year period. The company does not have the right to defer settlement of the loan.

• The balance on the property, plant and equipment comprises property of C3 150 000 and plant and equipment of Cl 050 000. Property is measured at valuation and plant and equipment is measured at cost. At year end, the directors engaged the services of an independent valuer who has valued the property at C3 950 000.

• During the year, an item of plant and equipment was sold for C330 000. This item of plant had cost C300 000 and to date of sale accumulated depreciation and tax allowances amounted to C120 000.

• The inventory has a net realisable value of Cl 720 000 and the accounts receivable are expected realise C980 000.

• Included in the operating expenses are depreciation of property, plant and equipment amounting to C210 000, salaries of Cl 800 000, advertising of C35 000, repairs to equipment of C28 000 and auditors remuneration of Cl10 000.

• Dividends of C0.05 per share were declared on 25 March 20X7. The financial statements were authorized for issue on 30 March 20X7.

• The financial director wishes to present the face of the statement of comprehensive income and statement of financial position in accordance with the minimum requirements of IAS I.

The current normal income tax rate is 29%.

Required:

a) Prepare the statement of comprehensive income of St Kitts Limited for the year ended 28 February 20X7, in accordance with International Financial Reporting Standards

b) Prepare the statement of changes in equity of St Kitts Limited for the year ended 28 February 20X7, in accordance with International Financial Reporting Standards

c) Prepare the current liabilities section of the statement of financial position of St Kitts Limited at 28 February 20X7, in accordance with International Financial Reporting

Standards

d) Prepare the following notes to the financial statements in accordance with International Financial Reporting Standards

• Statement of compliance and accounting policy for basis of preparation

• Share capital, profit before tax, taxation expense and dividends

"Is this question part of your assignment? We can help"

ORDER NOW