Reference no: EM133064909

Question - The Namibia Business Enterprise ("NBE") is in the process of preparing financial statements for the year ended 31 December 2020. The following is their trial balance as at that date:

(Note that figures in the above table are in N$000s - thousands)

Revaluation reserve is an amount by which and asset has gained more value above its original price when it was bought. It is part of equity.

The following additional information is also applicable to the year ended 31 December 2020:

1. An item of plant, originally purchased for N$500,000 on 1 March 2018, was sold on 2 December 2020 for N$390,000. NBE realised a profit of N$70,000 from this sale.

2. Land is to be revalued (to increase in value) to N$4m as at 31 December 2020.

3. Tax charge for the year ended 31 December 2020 is estimated at N$520,000.

4. The interest on the 8% loan has not been paid for the year ended 31 December 2020 and must be accrued.

5. Inventory as at 31 December 2020 was valued at N$2 890,000.

6. No dividends have been paid or proposed for the year ended 31 December 2020.

7. Adjustments for accruals and prepayments of expenses are required for the year ended 31 December 2020 as follows:

8. Depreciation is to be charged for the year ended 31 December 2020 as follows: Property - 2% per annum straight line on valuation amount, Plant and equipment - N$468 for the year, Furniture and fittings - 20% per annum straight line on cost.

Required -

1. Prepare the Statement of profit or loss, Statement of changes in equity (Statement of retained earnings) for the year ended 31 December 2020 and the Statement of financial position as at that date for NBE.

2. Identify any three external stakeholders of a company such as NBE and explain the significance of the financial statements you prepared in 3.1 above to these stakeholders.