The following information has been extracted from the books of Tonson, a limited liability company, as at 31 October 2011. [ACCA adapted]

You have also been provided with the following information:
i. Inventories at 31 October 2011 were valued at $275 000 based on original cost. However, $45 000 of these inventories has been in the warehouse for over two^years and the directors have agreed to sell it in November 2011 for a cash price of $20 000.
ii. The marketing expenses include $5000 that relates to November 2011.
111. Based on past experience the allowance for receivables is to be increased to 5% of trade receivables, iv. There are wages and salaries outstanding of $40 000 for the year ended 31 October 2011.
V. Buildings are depreciated at 5% of cost. At 31 October 2011 the buildings were professionally valued at $1 800 000 and the directors wish this valuation to be incorporated into the accounts.
vi.Depreciation is to be charged as follows:

a. Motor vehicles at 20% of written-down value.

b. Furniture and equipment at 20% of cost.
vii. No dividends have been paid or declared.
viii. Tax of $150 000 is to be provided for the year.
IX. During October 2011 a bonus (or scrip) issue of one for ten was made to ordinary shareholders. This has not been entered into the books. The share premium account was used for this purpose.
Required:
Prepare the following statements for internal use:

(a) the statement of income for the year ended 31 October 2011, and

(b) the statement of financial position as at 31 October 2011.

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DR $'000 CR $'000 Cash 15 Insurance 75 Inventories at 1 November 2010 350 General expenses 60 Energy expenses 66 50 Marketing expenses Wages and salaries 675 Discounts received 50 Share premium account 200 Retained earnings at 1 November 2010 Allowance for receivables at 1 November 2010 Sales revenue Telephone expenses 315 40 5 780 80 Property expenses 89 100