Xzibita Ltd is a wholesaler of women’s clothing. The trial balance below has been extracted from the nominal ledger of the company as at 31 December 2024:

No adjustments have yet been made in relation to the following matters:
(i) Inventory was counted on 31 December 2024 and valued at a total cost of £588,390. This total includes a batch of 700 coats which had originally cost £90 each and are normally sold by Xzibita Ltd for £160 each. Due to a defect in manufacture, they were all sold on 14 January 2025 at 50%
of their normal price. Selling expenses amounted to 10% of the proceeds.
(ii) Included in the balance for insurance in the above trial balance is an insurance premium of £53,472 paid on 15 April 2024, which represented 12 months’ insurance to 31 May 2025.
(iii) The company acquired a new building during the year, the purchase price of which is included in the figure for property at cost on the above trial balance. Legal fees of £81,000 were incurred in direct connection with this acquisition and these have been debited to the legal expenses account.
(iv) Company policy is to depreciate property on a straight-line basis over 50 years assuming a zero residual value. Plant & equipment is to be depreciated at 25% using the reducing balance method. A full year’s charge is applied in the year of acquisition and none in the year of disposal.
(v) Rent paid of £11,040 has been debited to the rent received account in error.
(vi) Xzibita Ltd employs the services of an external marketing agency. During December 2024, marketing expenses amounting to £29,740 were incurred for which no invoices have yet been received.
(vii) Various old debit balances on the purchases ledger totalling £3,890 need to be written off.
(viii) Cheque payments amounting to £13,310 had been correctly entered in the books in December but did not appear on the business’s bank statements until January 2025. Cheques received from customers totalling £7,560 were correctly entered in the cash book on 30 December 2024 and banked on the same day but these did not appear on the bank statement until 2 January 2025.
(ix) The bank loan of £800,000 was originally received on 1 June 2023 and is due to be repaid in full on 31 May 2028. Interest, at a fixed annual rate of 5.25%, is paid in arrears on a quarterly basis on 1 March, 1 June, 1 September and 1 November each year. Interest accrued but not yet paid has not yet been accounted for.
(x) The corporation tax charge on the profit for the year is estimated to be £158,090 (this estimate is unaffected by the various matters above).
Required:
In a form fit for publication, prepare the income statement for Xzibita Ltd for its year ended 31 December 2024 and a balance sheet as at that date.

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Bad debt expense Bank Bank loan Dividends paid Insurance Inventory as at 1 January 2024 Legal expenses Loan interest Marketing & advertising Ordinary shares of 5 pence each Overdraft interest Plant & equipment at cost Plant & equipment: accumulated depreciation as at 1/1/2024 Property at cost Property: accumulated depreciation as at 1/1/2024 Purchases Rent expense Rent received Retained earnings at 1 January 2024 Sales Share premium account Sundry operating expenses Trade payables Trade receivables Wages & salaries Dr 157,080 280,300 136,630 534,100 81,000 35,000 235,620 12,520 3,823,100 2,390,900 4,761,450 33,120 350,744 Cr 19,490 800,000 50,000 2,012,400 445,692 26,230 2,829,380 7,854,270 299,540 726,150 1,321,895 909,693 15,063,152 15,063,152