A Object Limited is a retail outlet selling word processing equipment both for cash and on hire purchase terms. The following information has been extracted

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A Object Limited is a retail outlet selling word processing equipment both for cash and on hire purchase terms. The following information has been extracted from the books of account as at 31 August 2012:

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Authorised, issued and fully paid share capital & Dr & Cr \\

(ordinary shares of $£ 1$ each)

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Additional information:

1 The company's policy is to take credit for gross profit (including interest) for hire purchase sales in proportion to the instalments collected. It does this by raising a provision against the profit included in hire purchase accounts receivables not yet due.

2 The cash selling price is fixed at $50 \%$ and the hire purchase selling price at $80 \%$ respectively above the cost of goods purchased.
3 The hire purchase contract requires an initial deposit of $20 \%$ of the hire purchase selling price, the balance to be paid in four equal instalments at quarterly intervals. The first instalment is due three months after the agreement is signed.
4 Hire purchase sales for the year amounted to $£ 540,000$ (including interest).
5 In February 2012 the company repossessed some goods which had been sold earlier in the year. These goods had been purchased for $£ 3,000$, and the unpaid instalments on them amounted to $£ 3,240$. They were then taken back into inventory at a value of $£ 2,500$. Later on in the year they were sold on cash terms for $£ 3,500$.
5 Depreciation is charged on premises and equipment at a rate of $15 \%$ per annum on cost.
Required:
Prepare Object Limited's income statement for the year ending 31 August 2012, and a statement of financial position as at that date.
Your workings should be submitted.
(Association of Accounting Technicians)