QUESTION 2 The following trial balance relates to KAF as at

QUESTION 2 The following trial balance relates to KAF as at 30 September 2012: GHS\'000 Stated capital (250m shares (note i) 8% loan note (note ii) Income surplus- 30/09/2011 Other equity surplus Capital surplus Land and building at valuation- 30/09/2011 Land (GHS 7m) and building (GHS36m) (note GHS\'000 61,000 30,600 12,100 3,000 7,000 43,000 67,400 Plant and equipment at cost Accumulated depreciation-30/09/2011 13,400

Solution

Investment fair value

Decrease

Statement of financial position

Land & building

(43+1.2+67.4-13.4)

Capital surplus(7000+1200)

Increase in land value

statement of changes in equity

Land and building

Revaluation

statement of other comprehensive income

Expense	amount	Income	amount
Investment fair value Decrease	2300	Revenue	182500
Cost of sales	128500	Investment income	800
Admin expense(25000-1850 dividend)	23150
Distribution cost	8500
Loan note interest	2400
Bank interest	300
Provision for tax	5600
Defered tax liability	3750
Net profit after tax	8800
	183300		183300
Dividend	1850		8800
Net profit for appropriation	6950
	8800		8800