Question 1

The following trial balance has been extracted from the books of A Ltd as at 31 March 2023

	$000	$000
	Dr	Cr
Office rent	98
Audit fee	22
Salaries	150
Bad debts	27
Administration expenses	125
Distribution expenses	23
Storage cost for distribution	110
Advertisement	40
Share capital (270,000 Ordinary shares)		270
Revaluation reserve		20
Dividend paid	27
Bank and cash	3
Accounts receivables	233
Long term investments	280
Interest paid	25
Dividend received		15
Interest received		1
Land and buildings at cost (land 100, building 100)	200
Accumulated depreciation, building		30
Plant and machinery at cost	400
Accumulated depreciation: Plant and machinery		170
Retained earning		315
Purchases	1,210
Sales		2,165
Inventory at 1 April 2022	140
Accounts payable		27
Bank loan	_______	100
	3,113	3,113

Additional information

1. Inventory on 31 March 2023 was valued at cost of $92,000 by a physical stock taking on that date, which included deteriorated goods cost $10,000. These goods can be sold for $4,000 if a further cost of $1,000 is spent on restating them.
2. Depreciation for the year to 31 March 2023 is to be charged against cost of sales as Buildings is 5% on cost (straight line method) and plant and machinery is 30% on reducing balance method.
3. Income tax of $165,000 is to be provided for the year to 31 March 2023. The loan is repayable in five years.
4. Salaries are to be apportioned equally between cost of sales, administration expenses and distribution expenses.
5. Office rent, audit fee, bad debts are classified as administrative expenses whereas advertisement should be treated as distribution expenses
6. Subject to professional valuer assessment, the land was revalued to $250,000 on 31 March 2023.

Required

Prepare the statement of profit or loss and other comprehensive income and statement of financial position for the year ended 31 March 2023 in accordance with the format under HKAS 1 (Revised).

(All relevant workings must be shown)