Nairobi Co. has an authorized share capital of 500,000 ordinary shares of €1 each. The following trial balance was extracted from the accounts as at 31 December 20X7.

The following matters are to be taken into account:
(i) Inventory at 31 December 20X7 was €168,000.
(ii) Wages and salaries outstanding at 31 December 20X7 were €7,000.
(iii) Property taxes and insurances paid in advance at 31 December 20X7 amounted to €1,000.
(iv) Depreciation is to be provided on cost of non-current assets at the rate of 10 per cent on fixtures and fittings and 2 per cent on freehold buildings.
(v) The allowance for bad debts is to be increased to €4,000.
(vi) Provision is to be made for the second half-year’s debenture interest.
(vii) Taxation based on the profits for the year is estimated at €30,000.
You are required to:
■ prepare, for Nairobi Co., an income statement for the year ended 31 December 20X7 and a balance sheet as at that date.

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Issued share capital Share premium account Retained earnings at 1 January 10 per cent debentures Allowance for doubtful debts Trade receivables Trade payables Freehold buildings (cost) Fixtures and fittings (cost) Accumulated depreciation - freehold buildings Accumulated depreciation - fixtures and fittings Bank balance Purchases Sales Audit fee Wages and salaries Discounts allowed and received Delivery costs inwards Property taxes and insurance Debenture interest paid (half-year to June X7) Bad debts Repairs General expenses Inventory 1 January 20X7 Returns inwards Returns outwards Directors' remuneration 000 000 500 20 64 100 3 150 80 450 150 120 51 660 1,218 16 220 18 16 6 5 5 7 17 55 120 12 9 90 2,032 2,032