Clarence Limited prepares its financial statements to 31 December each year and its trial balance at 31 December 2020 is shown below. Note Debit Credit Head office buildings: Cost Accumulated depreciation at 1 January 2020 Factories and warehouses: Cost Vehicles: Accumulated depreciation at 1 January 2020 Cost Accumulated depreciation at 1 January 2020 Trade receivables 22 22 223 150,000 60,000 765,000 75,000 63,000 25,500 46,500 Trade payables 30,000 Bank and cash 160,000 Current tax 4 4,500 Loan repayable on 30 June 2025 45,000 Warranty provision 5 90,000 1 ordinary share capital 60,000 Share premium 15,000 Revenue 945,000 Purchases 117,000 Inventory at 1 January 2020 6 43,500 Selling and distribution expenses 75,000 Administrative expenses 112,500 Loan interest 10,450 Retained earnings 1,542,950 192,950 1,542,950 1. In January 2020, Clarence Limited decided to update and network the company's computer equipment. The details are as follows: List price of computer hardware Additional costs: Shipping and handling Cabling and wiring One month's testing prior to going live Own staff costs related to preparation of offices prior to installation 100,000 5,000 4,000 3,000 8,000 With respect to the computer hardware, Clarence Limited negotiated a 10% trade discount on the list price. While all amounts due were paid in March 2020, no aspect of this transaction is reflected in the trial balance at 31 December 2020 shown above. 2. Depreciation has still to be charged for the year ended 31 December 2020. Clarence Limited charges and allocates depreciation as follows: Category Head office buildings Factories and warehouses Computer equipment Vehicles Basis 2% on cost 4% on cost 20% on cost 20% of carrying amount Charged to Administrative expenses Cost of sales Administrative expenses Cost of sales It is company policy to charge a full year's depreciation in the year of acquisition and none in the year of disposal. 3. In January 2021, a customer of Clarence Limited, Roy Limited, went into liquidation. The amount owing at 31 December 2020 was 10,000. There were no further transactions between the two companies prior to Roy Limited's liquidation. 4. The tax rate is 20% and the current tax liability for the year ended 31 December 2020 has been calculated at 78,000, which is payable in September 2021. The balance in the current tax account shown in the trial balance is the balance remaining after settling the amount due for the year ended 31 December 2019. 5. Clarence Limited provides a two-year warranty on some of the company's products. The balance in the warranty provision account represents the estimated provision for future warranty costs at 31 December 2019. It is estimated that the provision should be 120,000 at 31 December 2020 and that future warranty claims will arise evenly over the two-year warranty period. 6. Inventory at 31 December 2020 was valued at 45,000. Requirement Prepare a statement of profit or loss and other comprehensive income for the year ended 31 December 2020 and a statement of financial position as at that date for Clarence Limited