Additional Information
(i) N800,000 was raised on July 31, 2025 through the issue of ordinary shares. This was correctly accounted for by crediting N320,000 to ordinary share capital and N480,000 to share premium.
(ii) The loan notes were issued during the year, interest is payable annually in arrears. No interest has been provided for or paid as at July 31, 2025.
(iii) Income tax for the year was estimated at N440,000. The balance in the trial balance is a residual amount following the payment of the income tax for the year ended July 31, 2024 and its offset against the provision made that year.
(iv) The figures for financial assets represent the fair value of equities held at August 1, 2024 plus the costs of equity purchased during the year. As permitted by IFRS 9 “Financial Assets” an election was made at the date of purchase to account for any fair value gains or losses on all these financial assets (equity investments) through ‘other comprehensive income’. Fete Renovations Plc takes such gains and losses to a separate component of equity. The fair value of the financial assets (equity investments) at July 31, 2025 was N500,000.
(v) Investment properties are accounted for under the fair value model of IAS 40 “Investment property”. The figure included in the trial balance above represents the fair value of these properties at August 1, 2024. The fair value of these properties at July 31, 2025 was N2,800,000.
(vi) Plant and equipment is being depreciated through cost of sales at 20% per annum on reducing balance basis. On July 31, 2025 a plant which cost N800,000 on August 1, 2023 was sold for N440,000. The only entries made to record this transaction were to debit cash and credit sales revenue with N440,000.
(vii) Land and building are carried under the revaluation model as permitted under IAS 16“Property, Plant and Equipment”. The most recent valuation took place on July 31, 2023, resulting in the values included in the trial balance above. The revaluation surplus of N480,000 resulted solely from these land and buildings. The buildings were estimated to have a useful economic life of 17 years as at that date and zero residual value. On July 31, 2025, the land was revalued to N400,000 and the buildings to N1,800,000. There was no change to the useful life estimates of the buildings. Depreciation is recognised on straight-line basis through costs of sales and no depreciation has yet been charged for the year ended July 31, 2025.
(viii) Fete Renovations Plc maintains a provision for warranty claims expected to arise in the future for renovation items sold. At the reporting date this provision was carried at N240,000. It has been agreed that this provision should be increased to N350,000.