Epsilon Plc
 Date: 31 December 2023

Trial Balance:

Description	Dr (£000)	Cr (£000)
Bank overdraft		50
Called-up share capital (ordinary shares of £1 each)		1,900
Accounts payable		80
Accounts receivable	60
Non-current assets: at cost	360
Accumulated depreciation (at 1 January 2023)		180
Marketing expenses	160
Office expenses	190
Retained profits (at 1 January 2023)		260
Production expenses	2,800
Purchases (net of VAT)	4,200
Sales (amounts invoiced, net of VAT)		8,400
Inventory (at 1 January 2023)	180
Trade accounts payable		210
Trade accounts receivable	2,900
Total	9,360	9,360

Additional Information:

1. Inventory at 31 December 2023 was valued at £220,000.
2. At 31 December 2023, £45,000 was owing for office expenses, and £35,000 had been paid in advance for marketing expenses.
3. A customer had gone into liquidation owing the company £350,000; the company does not expect to recover any of this debt.
4. The company decides to set up an allowance for doubtful debts amounting to 5% of the outstanding trade accounts receivable as at the end of each financial year.
5. Depreciation is to be charged on the non-current assets at a rate of 20% on cost; it is to be apportioned as follows:
   • Marketing: 30%
   • Office: 20%
   • Production: 50%

Note:
 There were no acquisitions or disposals of non-current assets during the year to 31 December 2023.

Required:
 Prepare Epsilon Plc’s income statement for the year ending 31 December 2023, and a balance sheet as at that date.