Q: $1$ manufactures radar equipment for militany ard civa aircrapt. The company's thal baland at $31$ December $208$ is as follows:

Administration costs. Bank overdrapt

Receivasles

Factay $-cos7$

Factong $-$ Depreciation

factory running cosis

Loan interest

$$0Co$

$700$

Long$-$term loans

M aclvineny $-$ cost

$q,$

$$000800$

Machineng $-$ Depreciation

$1,8c0$

manufacturing wages

opening inventong$-$pans & materials $1,300$

opening inventay swokk in progress $-900$

hetained carmings

$380$

Purchases $-$ parts and materials $q,$ hesearch & development $q,2,300$

Revenue $q,5,300q,$

Sales dept Salaries $600$

share capital

Trade payales $q,10,000$

Trade fairt

$1,000$

i$)$ inventay was counted at $31$ Dec $208.$ Closing inventories of parts $$ matenals were valued at $$520,000$ and closing inventovies of wip were valued at $$710,000-$ Thare are no inventories of finished goods because all production is for specific customer orders and goods are usually shipped

as soon as they are completed.

ii$)$ No depreciation has been charged for the year ended $31$ Dec $208.$ The company depreciates the factory at $2$ of cost per annum and all machineng at $25?$ por annum on the heducing balance basis.

iii$)$ The balance on the research and development account is made up as follows:

opening balance $($development cooss blf$)$

purchase of Laboratong calibration eguipment

Long$-$range redar project

The opening balance compuises expenditure on rew products which have just been introduced to the manket. The company has decided that these cos$)$s Should be written off over ten gears, starting with the year ended $31$ Dec $208.$ The new cal,$3$rating egnipment io used in the companys research Laboratong. It o used lo coswe that the measurement devices used duving expeniments are property adjusted. The long range radar project is intend ed fo adapt existing militany Fadar technology jor civilian air traffic control purposes. the company has buit a success cul protetyee and has had strong expressiong of interest form a numb er get potential customers it ts almost Gertain ta at the company willstary to sell this product early is the year $20y0$ and that if will make a profit.

The wide$-$angle microware project is an attempt$-$ to apply some theoretical concepts to create a new radar system for use in mollit ang aircraft. Inctial experiments have been promising, but there is little immediate prospect of a saleasle product because the transmiter b jour too large and heary to instate is an aeroplane

iv$)$ Duing the year the company spent $$1,000,000$ in order to exhibit its product range at a major trade fair. This was the firot time that I had attended such an event$-$No orders have been received as a direct resuct of this fair, although the sales director has arg ned that contraas were made which will generate sules over the next few years.

v$)$ T has made losses for tax purposes for several yeaus. It does not expect any tex change for the year ended $31$ December $208$

vi$)$ The directos do not plan to propose any dividends Jer the year ended $31$ Decembor $208.$

Required

Prepare is statement of profit or loss for the year ended $31$ December $208$ and its statement of financial perition at that date. These should be $\frac{?}{\text{b}\text{a}\text{r}}(n)$ a form suitalle for pislication and should be accompanced by notes as yar as you are able to prepare these from the information pronided.

Wide $-$ argle Microwave pr$$ject