CLIFTON PHARMA LIMITED The following trial balance relates to Clifton Pharma Limited for the financial year ended 30 September 2018, assume you are working as an Accounts Executive in this Company. "Dr. " "Cr. " Cost of sales 134,000 Operating Expenses 35,000 Loan interest paid (see note 1) 1,500 Rental of vehicles (see note 2) 7,000 Revenue 338,300 Investment income 2,000 Leasehold property at cost (see note 4) 250,000 Plant and machinery at cost 197,000 Accumulated depreciation at 1 October 2017: Leashold property 40,000 Plant and equipment 47,000 Investments 94,000 Share capital 280,000 Share premium 20,000 Retained earnings at 1 October 2017 19,300 Loan notes (see note 1) 50,000 Deferred tax balance at 1 October 2017 (see note 5) 20,000 Inventory at 30 September 2018 23,700 Trade receivables 76,400 Trade payables 14,100 Bank 12,100 830,700 830,700 The following information is relevant for the preparation of financial statements for the year ended 30 September 2018: 1) The effective interest rate on the loan notes is 6% per year. 2) A recent review by the finance department of lease contract has reached the conclusion that 7,000 was paid: the lease agreement is for a four-year period in total, and there will be three more annual payments in advance of 7,000, payable on 1 October in each year. The vehicles in the lease agreement had a fair value of 24,000 at 1 October 2017 and they should be depreciated using the straight line method to a nil residual value. The interest rate implicit in the lease is 10% per year. 3) Other plant and equipment is depreciated at 20% per year by the reducing balance method. All depreciation of property, plant and equipment should be charged to cost of sales. 4) The leashold property has a 25 - year life and is amortised at a straight-line rate. On 30 September 2018 the leasehold property was revlaued to 220,000 and the directors wish to incorporate this revaluation in the financial statements. 5) The provision for income tax for the year ended 30 September 2018 has been estimated at 18,000. At 30 September 2018 there are taxable temporary differences of 92,000. The rate of income tax on profits is 25% Required: a) Prepare a statement of Profit or Loss for the year ended 30 September 2018 . b) Balance Sheet as at 30 September 2018