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QUESTION 1 (30 Marks: 63 minutes)
The following is the trial balance of Eskimo Limited at 31 December20x8:
ESKIMO LIMITED TRIAL BALANCE AT Debit Credit Retained earnings(1/1/20x8) 145 000 Non- current liabilities: Loan from AB Bank 25000 Revaluation surplus (1/1/20x8) 20 000 Ordinary share capital240 000 Revenue: Sales 580 000 Interest income 12 500 Rent income23 000 Cost of sales 300 000 Interest on bank overdraft 9 500General expense 113 000 Bad debts expense 20 000 Repairs andmaintenance expense 30 000 Marketing expense 22 000 Fuel expense 40000 Depreciation expense 25 000 Salaries 50 000 Investments inlisted companies 50 000 Accounts receivable 250 000 Bank 23 000Current tax payable 12 800 Inventories 120 000 Accounts payable 225000 Land 200 000 Equipment: Cost 100 000 Equipment: Accumulateddepreciation 40 000 Income tax expense 1 800 Dividends 15 000 1 346300 1 346 300

Additional information:
? Share capital constitutes 120 000 ordinary shares of no parvalue. 20 000 shares were issued for N$40 000 on the first day ofthe year. ? The interest and rental income are incidental to mainbusiness operations.


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? Eskimo Limited classified expenses according to their function.Management categorise the functions of the business into the areasof sales, administration and distribution. ? Salaries of N$ 30 000relate to the administrative function and N$20 000 the distributionfunction. ? Depreciation on equipment of N$10 000 relates to theadministrative function and N$15 000 to the distribution function.? The bad debts and marketing expenses relate to the administrationfunction. ? The repairs and maintenance and fuel expenses relate tothe distribution function. ? Dividends of N$15 000 in respect ofthe year ended 31 December 20x7 were declared and paid duringJanuary 20x8. Dividends of N$20 000 in respect of the year ended 31December 20x8 were declared on 15 January 20x9 ? There are nomovements in other comprehensive income.

Required:
a) Prepare the statement of profit or loss and other comprehensiveincome (use the expenses by function method) including earnings pershare (EPS) of Eskimo Limited for the financial year ended 31December 20x8 in accordance with International Financial ReportingStandards. (15 marks) b) Prepare the statement of financialposition of Eskimo Limited at 31 December 20x8 in accordance withInternational Financial Reporting Standards. (12 marks) c) Preparethe following notes to the financial statement in accordance withInternational Financial Reporting Standards: (3 marks) a. Summaryof significant policies b. Revenue

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Jamar Ferry
Jamar FerryLv2
28 Sep 2019

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