figures for 'Plant and Machinery at cost' and 'Provision for depreciation on plant and machinery' are those brought forward from 1.4.2010. iv) A provision of 2% of debtors is to be created for doubtful debts. v) The factory repairs and maintenance balance includes 25,000 which relates to the purchases of new machinery. vi) One-half of the insurance paid for both factory and office relates to a prepayment for the following financial year. vii) Further land and buildings with a current 'book' value of 2,000,000 have been independently re-valued at 3,500,000. This gain is to be reflected in the accounts, and is not included in any of the above. viii) The company owns investments overseas and there has been a gain on foreign exchange translation of 650,000. This gain is to be reflected in the accounts and is not included in any of the above Required: a) A manufacturing account for the year ended 31st March 2011 (workings to the nearest k). (12 marks) b) A Statement of Comprehensive Income using either format 1 or format 2 of IAS 1: Presentation of Financial Statements (workings to the nearest k). (12/3 marks) c) Calculate the basic Earnings per Share (EPS) for the year. (3 marks) d) Explain your treatment of items vii) and viii) above. END OF SECTION A (6 marks) (total 331/3 marks) SECTION A COMPULSORY QUESTION Question A1 Valley plc has an issued capital of 5,000,000 consisting of twenty million ordinary shares of 25p each. The company's principal activity is the manufacture of components for the motor industry. The following information has been extracted from the books of the company as at 31st March 2011. Inventory as at 1st April 2010: Raw materials Work-in-progress Finished goods 000's 387 640 1,204 Purchases of raw materials Direct wages Indirect wages (factory) 6,103 780 300 Customs duty on purchase of raw materials 6 Factory electricity 700 Factory repairs and maintenance 125 Plant and Machinery at cost 1,880 Provision for depreciation of plant and 470 machinery Rates - factory 43 - office 28 Insurance factory - office General office expenses Sales turnover Debtors Bad debts written-off Additional information: 30 17 2,253 14,170 2,256 80 i) Inventory as at 31st March 2011: Raw materials Work-in-progress Finished goods 000's 434 590 1632 ii) During the year the company purchased a freehold building. Legal costs of 30,000 relating to this acquisition have been debited to general office expenses. iii) Provision is to be made for depreciation on plant and machinery (exclusive to the factory) at the rate of 25% (reducing balance basis). A full years charge is made in the year of acquisition. The