Kappa Ltd
 Date: 31 March 2024

Trial Balance:

Description	Dr (£000)	Cr (£000)
Bank overdraft		195
Called-up share capital (ordinary shares of £1 each)		4,800
Accounts payable		225
Accounts receivable	205
Non-current assets: at cost	650
Accumulated depreciation (at 1 April 2023)		470
Marketing expenses	450
Office expenses	480
Retained profits (at 1 April 2023)		550
Production expenses	5,700
Purchases (net of VAT)	7,100
Sales (amounts invoiced, net of VAT)		14,200
Inventory (at 1 April 2023)	470
Trade accounts payable		500
Trade accounts receivable	5,800
Total	13,330	13,330

Additional Information:

1. Inventory at 31 March 2024 was valued at £540,000.
2. At 31 March 2024, £190,000 was owing for office expenses, and £180,000 had been paid in advance for marketing expenses.
3. A customer had gone into liquidation owing the company £640,000; 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: 20%
   • Office: 30%
   • Production: 50%

Note:
 There were no acquisitions or disposals of non-current assets during the year to 31 March 2024.

Required:
 Prepare Kappa Ltd’s income statement for the year ending 31 March 2024, and a balance sheet as at that date.