The following trial balance has been extracted from the books of Baganza plc as at 30 September 2007:

Additional information:

1 The inventory at 30 September 2007 was valued at 3,600,000.

2 Depreciation for the year to 30 September 2007 is to be charged on the historic cost of the non- current assets as follows:

Freehold property: 5%

Plant and machinery: 15%

3 The basic rate of income tax is assumed to be 27%.

4 The directors propose a final dividend of 60p per share.

5 The company was incorporated in 2000.

6 Corporation tax based on the profits for the year at a rate of 35% is estimated to be 850,000.

7 A transfer of 40,000 is to be made to the deferred taxation account.

Required: 

In so far as the information permits, prepare Baganza plc's income statement for the year ending 30 September 2007, and a balance sheet as at that date in accordance with the appropriate accounting standards.

However, formal notes to the accounts are not required, although detailed workings should be submitted with your answer, which should include your calculation of earnings per share.

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000 000 Administrative expenses 400 Called up share capital (1,200,000 ordinary shares of 1 each) Cash at bank and in hand Corporation tax (overpayment for the year to 30 September 2006) Deferred taxation (at 1 October 2006) Distribution costs 99 1,200 60 20 460 600 Dividends received (on 31 March 2007) 249 Freehold property: at cost accumulated depreciation (at 1 October 2006). Interim dividend (paid in June 2007) 2,700 260 36 Investments in United Kingdom companies. 2,000 Plant and machinery: at cost 5,200 accumulated depreciation (at 1 October 2006) 3,600 Purchases 16,000 Research expenditure 75 Retained profits (at 1 October 2006) 2,022 Inventory (at 1 October 2006) 2,300 Trade accounts payable Trade accounts receivable Turnover 2,900 2,700 21,360 32,071 32,071