Massey Limited is a retailer in Hong Kong. The following is its trial balance as at 31 December 20X0.

Question 2 (35 marks) Massey Limited is a retailer in Hong Kong. The following is its trial balance as at 31 December 20X0. Dr S000 S000 1,824 1,000 20 12 440 Sales Purchases Administrative costs Delivery expense Plant and machinery-cost Plant and machinery- Accumulated depreciation Land Revaluation reserve-land Purchase return Sales return and allowance Transportation in/ Carriage inwards Warehouse wages Salesmen's salaries Administrative wages and salaries 2,000 Motor vehicles expenses Directors' remuneration Ordinary share capital (2,640,000 share issued and fully paid) General reserve Retained profits as at 1 January 20X0 Inventory as at 1 January 20X0 Rental income Trade receivables Cash at bank Trade payables 5,000 IEE The following additional information is supplied: Depreciate plant and machinery at 20% on straight-line basis. No residual value for the plant and machinery Inventory at 31 December 20X0 is $180,000 Accrued auditors' rermmeration is $4,000. Profits tax for the year will be $12,000 payable in October 20X1. It is estimated that 60% of the plant and machinery is used in connection with distribution, with the remainder for administration. The motor vehicle expense should be allocated to distribution. Land is revalued to be $3,000,000 at 31/12/20x0, and no depreciation is to be provided for the land. 3 Required: Prepare a statement of profit or loss and other comprehensive income (the classification of expenses by function showing the grouping of distribution cost and administration cost clearly) and a statement of financial position according to HKAS 1