Hafeni Limited changed its inventory valuation method from weighted average method to FIFO as this will result in fairer presentation as the matching of revenue and expenses will be improved.
The effect of the change is as follows:
|
Year-end inventory balances
|
2015
N$
|
2014
N$
|
2013
N$
|
2012
N$
|
|
Weighted average method (old method)
|
15 000
|
14 000
|
12 000
|
10 000
|
|
FIFO method (new method)
|
18 000
|
15 000
|
14 000
|
11 000
|
The draft financial statements before the change in accounting policy are as follows:
|
HAFENI LIMITED
DRAFT STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2015
|
|
2015
N$
|
2014
N$
|
|
Revenue
|
1 200 000
|
900 000
|
|
Cost of sales
|
(420 000)
|
(350 000)
|
|
Gross profit
|
780 000
|
550 000
|
|
Other costs
|
(220 000)
|
(200 000)
|
|
Profit before tax
|
560 000
|
350 000
|
|
Income tax expense
|
(235 200)
|
(136 500)
|
|
Profit for the year
|
324 800
|
213 500
|
|
Other comprehensive income for the year
|
-
|
-
|
|
Total comprehensive income for the year
|
324 800
|
213 500
|
|
HAFENI LIMITED
DRAFT STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2015
|
|
Retained earnings
N$
|
|
Balance: 1/1/2014
|
67 500
|
|
Total comprehensive income: 2014
|
213 500
|
|
Balance: 31/12/2014
|
281 000
|
|
Total comprehensive income: 2015
|
324 800
|
|
Balance : 31/12/2015
|
605 800
|
REQUIRED
Prepare the statement of profit or loss and other comprehensive income, statement of changes in equity, statement of financial position and the relevant notes of Hafeni Limited for the year ended 31 December 2015 in accordance with International Financial Reporting Standards.