The following trial balance was extracted from the books of Old NV on 31 December 20X1.

Note of information not taken into the trial balance data:

(a) Provide for:
(i) An audit fee of €38,000.
(ii) Depreciation of plant at 20% straight-line.
(iii) Depreciation of vehicles at 25% reducing balance.
(iv) The goodwill suffered an impairment in the year of €177,000.
(v) Income tax of €562,000.
(vi) Debenture interest of €25,000.

(b) Closing inventor y was valued at €1,125,000 at the lower of cost and net realisable value.

(c) Administrative expenses were prepaid by €12,000.
Required:

(a) Prepare an income statement for internal use for the year ended 31 December 20X1.

(b) Prepare an income statement for the year ended 31 December 20X1 and a balance sheet as at that date in Format 1 style of presentation.

(c) Explain how the income statement and balance sheet in

(b) above would be changed to comply with the Phase A changes proposed for a revised IFRS 1.

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Sales Returns outwards Provision for depreciation 000 000 12,050 313 plant 738 vehicles 375 Rent receivable 100 Trade payables 738 Debentures 250 Issued share capital - ordinary 1 shares 3,125 - preference shares (treated as equity) 625 Share premium 250 Retained earnings 875 Inventory 825 Purchases 6,263 Returns inwards 350 Carriage inwards 13 Carriage outwards 125 Salesmen's salaries 800 Administrative wages and salaries 738 Plant (includes 362,000 acquired in 20X1) 1,562 Motor vehicles 1,125 Goodwill 1,062 Distribution expenses 290 Administrative expenses 286 Directors' remuneration 375 Trade receivables 3,875 Cash at bank and in hand 1,750 19,439 19,439