Answer all questions. Each question carries 25 marks. Question 1: You are presented with the following trial balance of Annie Trading Investment Holdings, a limited liability company, at 31 October 2021. Dr. Cr. 5000 5000 Land at cost Buildings at cost Motor vehicles at cost Equipment at cost Buildings, accumulated depreciation, at 1 November 2020 Motor vehicles, accumulated depreciation, at 1 November 2020 Equipment, accumulated depreciation, at 1 November 2020 Trade receivables Cash Trade payables Bank overdraft Bank loan Share capital Retained earnings at 1 November 2020 Sales Sales return Inventory at 1 November 2020 Purchases Travelling expenses (Distribution costs) Insurance (Distribution costs) Utility expenses (Distribution costs) Printing expenses (Administrative expenses) Salaries (Administrative expenses) Bank loan interest paid Page 2 of 10 3,495 7,920 1,260 2,400 8,280 252 447 2,010 22,368 1,950 984 360 1,101 4,260 207 57,294 3,750 210 1,005 2.250 786 2,247 8,010 2,763 36,273 57,294 Additional information as 31 October 2021: 1. Buildings are depreciated at 10% of cost, allocated to administrative expenses. 2. Motor vehicles are depreciated at 20% of cost, allocated to administrative expenses. Equipment is depreciated at 30% of cost, allocated to distribution costs. 3. 4. There were no additions or disposals of non-current assets during the year. 5. Inventory at 31 October 2021 was valued at $2,037,000. 6. Land was revalued at 31 October 2021 to $4,563,000. Tax of $252,000 is to be provided for the year. 7. Required: a. Prepare a statement of profit or loss and other comprehensive income for the year ended 31 October 2021 of Annie Trading Investment Holdings Limited in accordance with "HKAS 1 Presentation of Financial Statements". (11 Marks) b. Explain the following accounting items in relation to Annie Trading Investing Holdings Limited: i. Current assets and non-current assets; Current liabilities and non-current liabilities. (6 Marks) C. Audit committees contribute significantly to raising the standards of corporate governance if they operate effectively. Please evaluate this statement.
