558 12 Question 2 (a) The draft statement of profit or loss of Lyon Ltd for the year to 30 June 2021 is as follows: $000 Sale revenue Cost of sales (184) Gross profit 374 Other income Distribution costs (59) Administrative expenses (148) Profit before tax 179 (35) Profit for the year 144 In March 2021, the company sold one of its business operations, incurring a loss of $17,000 on the sale. This loss is included in administrative expenses. The associated tax effect of $3,000 has been deducted when computing the tax expense shown in the draft statement of profit or loss. Tax The operation sold in March 2021 yielded sales revenue of $103,000 during the year to 30 June 2021. Related costs were cost of sales $38,000, distribution costs $2,000 and administrative expenses $20,000. The tax expense shown in the draft statement of profit or loss includes $9,000 in relation to the profit made by this operation. Required: Revise the statement of profit or loss in accordance with the requirements of HKFRS 5 and prepare a suitable note relating to discontinued operations which could appear in the notes to the financial statements. (15 marks) (b) On 1 April 2021 a machine of Lyon was classified as "held for sale" under HKFRS 5. The machine had a cost of $60,000 on 1 July 2019 and was expected to sell for $25,000 with no selling costs. The company charges depreciation on plant and equipment at 20% on cost. Required: Determine the carrying amount of the machine at 30 June 2021 and total charge to profit or loss for the year ended 30 June 2021 in accordance with HKFRS 5