Ahmed Plc Income Statement for the year ended $30$ September $20232023000$ Revenue $98,000$ Cost of Sales $(56,600)$ Gross Profit $41,400$ Administration Expenses $(20,100)$ Trading Profit $21,300$ Finance Costs $(6,600)$ Profit on Ordinary Activities Before Taxation $14,700$ Taxation on Profit on Ordinary Activities $(7,938)$ Profit for the Year $6,762$ Assignment Brief Template Page $5$ of $12$ This document is for De Montfort University use and should not be passed to third parties or posted on any website. Ahmed Plc Balance Sheet as at $30$ September $20232023$ Non$-$Current Assets $000$ Intangible Assets $22,450$ Property, Plant and Equipment $87,200$ Other Investments $17,800127,450$ Current Assets Inventories $18,700$ Trade and Other Receivables $27,530$ Cash and Short$-$Term Deposits $13,40059,630$ Total Assets $187,080$ Current Liabilities Bank Overdrafts $12,600$ Unsecured Bank Loans $8,400$ Trade and Other Payables $13,200$ Current Tax Liability $9,32043,520$ Non$-$Current Liabilities Medium Term Bank Loans $22,000$ Finance Leases $9,600$ Provisions $10,20041,800$ Total Liabilities $85,320$ Net Assets $101,760$ Equity Called Up Share Capital $37,200$ Share Premium $24,000$ Other Reserves $12,400$ Retained Earnings $28,160101,760$ Assignment Brief Template Page $6$ of $12$ This document is for De Montfort University use and should not be passed to third parties or posted on any website. A$.$ The Directors of Ahmed Plc are considering to capitalize interest $($finance cost$).$ Using the extract below show the effect of capitalisation of interest on Income statement and Balance Sheet. $11$ Marks Before Capitalisation of interest After Capitalisation of interest $000000$ INCOME STATEMENT Revenue $98,000$ Trading Profit $($a$)21,300$ Finance Costs $($b$)6,600$ Profit on Ordinary Activities Before Taxation $($a$-$b$)14,700$ Profit for the Year $6,762$ BALANCE SHEET Non$-$Current Assets $127,450$ Equity $101,760$ Book Value of Debt $($Total Borrowings$)$ B$.$Creativity is used to give company accounts a more favourable appearance.$$ Show the effect of capitalisation of interest for the understanding of profitability and performance of the company, through the ratio calculations both before and after the capitalisation of interest. $1.$ Profit before Tax $\%4$ marks $2.$ Gearing ratio $4$ marks Assignment Brief Template