Land and buildings consist of freehold land with a factory building

erected on it$,$ acquired on $16$ July $2005.$ The land and buildings

are situated at $16$ Dermar Avenue, Salt Lake City. The land and

buildings have been mortgaged as per note $2$ above.

$4$ Depreciation rates are as follows:

Land and buildings $-$ not depreciated.

Plant and equipment $-10\%$ per annum on cost$.$

Motor vehicles $-20\%$ per annum on cost$.$

$5$ The investment consists of $5000$ ordinary shares in Vesper Ltd

with a market value of R$27000.$

$6$ The inventory on hand at $30$ June $2007$ consists of merchandise

valued at R$6400.$ The inventory is valued at the lower of cost or

net realisable value on the first$-$in$-$first$-$out basis.

$7$ Provision should be made for a dividend of $10\%$ on ordinary

shares and for SA normal tax of R$10000.$

$8$ An amount of R$5000$ should be transferred to the general reserve.

$9$ Administrative expenses include the following:

Audit fees $2000$

Director's fees $4000$

Interest on loan $2000$

You are required to:

Draw up the income statement for internal use