Prepare an Income Statement and a Balance Sheet

Cr ('000) Dr ('000) 39 10 9 300 12 15 110 24 78 1430 280 49 30 Administration costs Bank balance Debenture interest Debenture (6% p.a., repayable at par 2025) Discount allowed Discount received Fixtures and fittings - cost Fixtures and fittings - provision for depreciation Inventory (as at 1 January 2019) Land and buildings Machinery - cost Machinery - provision for depreciation Non-current assets disposal Ordinary dividends (interim paid) Ordinary shares (10p each) Preference dividends (interim paid) Preference shares (redeemable 2030) Provision for doubtful debts Purchases Retained earnings as at 1 January 2019 Returns in Returns out Revaluation reserve as at 1 January 2019 Sales revenue Selling distribution costs Trade payables Trade receivables 120 400 4 200 13 910 23 31 24 240 1860 135 110 120 3288 3288 a) Debenture interest and preference dividends are paid every six months - only the payments for the first six months of this accounting period have been booked. The preference shares do not carry voting rights and bear a variable rate of interest, calculated as equivalent to 4% p.a. for the final six months of this accounting period. A final dividend of 3p per ordinary share has been proposed. The directors announced this final dividend on 31 December 2019. b) On 30 June 2019, some obsolete machinery was sold for 30,000. It had cost 55,000 and 37,000 had been provided as depreciation up to 31 December 2018. In line with the company's policy, no depreciation charge has been booked for 2019. However, no entries have been made in the accounts relating to the disposal except to debit the bank account and credit a non-current asset disposals account with the proceeds. c) No provision for depreciation has been made for the year ended 31 December 2019. Company policy is to calculate depreciation on the straight-line method. Machinery is depreciated at 20% p.a. assuming a zero scrap value. Fixtures and fittings are depreciated at 10% p.a. assuming a zero scrap value. Machinery depreciation is charged to cost of sales and fixtures and fittings depreciation is charged to administration costs. d) Land and buildings are owned freehold and are not depreciated. On 31 December 2019 the buildings were valued by a professional surveyor at 1,500,000. The company would like to incorporate this valuation in its accounts. e) An internal review revealed that payments totalling 8,000 of insurance costs relating to the month of January 2020 have been charged to administration costs. Furthermore, there has been no recognition of unpaid distribution costs of 10,000 relating to December 2019. f) On 31 December 2019, the accounts receivable manager learnt that a customer has declared bankruptcy and will not be able to pay the remaining 11,000 balance that it owes Rosa Ltd. The Directors have decided to maintain the provision for doubtful debts at 7% of closing trade receivables. Doubtful debt provisions and bad debts are charged to selling costs. g) The closing inventories are valued at cost of 83,000. h) An estimated tax charge for the period of 70,000 has not yet been recorded. Question: Prepare an income statement for the year ended 31 December 2019 and a Statement of Financial position statement (balance sheet) at that date