From the following selected balances of State plc as at 31 December 2008, prepare (i) a detailed income statement for the year ended 31 December 2008 for internal use and (ii) an income statement for the same period for publication.

(a) The production department puts goods bought into a saleable condition.

(b) Inventory at 31 December 2008 £160,000.

(c) Apportion motor expenses: distribution 7/4, administrative 1/4.

(d) Apportion rent and business rates: distribution 40%, administrative 60%.

(e) Write £26,000 off the value of investments in undertakings in which the company has a participating interest.

(f) Depreciate motor vehicles 25% on cost, plant and machinery 15% on cost.
(g) Accrue auditors’ remuneration £14,000.
(h) Accrue corporation tax on ordinary activity profits £104,000.
(i) A sum of £25,000 is to be transferred to loan note redemption reserve.

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Inventory 1 January 2008 Revenue Purchases Carriage inwards Returns inwards Returns outwards 140,000 1,860,000 1,140,000 8,000 9,000 5,000 Discounts allowed 11,000 Discounts received 14,000 Wages (putting goods into saleable condition) 88,000 Salaries and wages: Sales and distribution staff 62,000 Salaries and wages: Administrative staff Motor expenses (see Note (c)) 74,000 24,000 Rent and business rates (see Note (d)) 28,000 Investments in associates (market value 74,000) Income from associates 100,000 5,000 General distribution expenses 12,000 General administrative expenses Bad debts Interest from government securities Haulage costs: Distribution 6,000 2,000 3,000 4,000 Loan note interest payable 2,000 Retained profits 31 December 2007 94,000 Motor vehicles at cost: Distribution and sales 60,000 Administrative 26,000 Plant and machinery at cost: Distribution and sales 50,000 Administrative 30,000 Production 60,000 Directors' remuneration Dividends paid 36,000 60,000