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:

	N$000	N$000
Revenues (sales)		28,342
Purchases	19,301	1,911
Inventory at 1 January 2020	3,603
Expenses	5,648
Land at valuation	3,500
Property at valuation	7,350
Property accumulated depreciation at 1 January 2020		1,911
Furniture and fittings at cost	1,110
Furniture and fittings accumulate depreciation at 1 January 2020		666
Plant and equipment at cost	4,320
Plant and equipment accumulated depreciation at 1 January 2020		1,660
Trade receivables	3,350
Trade payables		3,420
Cash	60
Bank overdraft		550
Ordinary issued 50c share		5,500
Revaluation reserves at 1 January 2020		1,000
Retained earnings at 1 January 2020		3,193
8% loan redeemable 2015		2,000
	48,242	48,242

(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:

	Accruals	Prepayments
Expenses	N$120,000	N$150,000

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.