Question 1

The following trial balance was extracted from the books of Old NV on 31 December 20X1.

	000		000
Sales			12,050
Returns outwardsProvision fordepreciation Plant			313 738
Vehicles			375
Rent receivable			100
Trade payables			738
Debentures			250
Issued share capital ordinary 1 shares			3,125
Issued share capital preference shares (treated as equity)			625
Share premium			350
Retained earnings Inventory	825		875
Purchases	6,263
Returns inwards	350
Carriage inwards	13
Carriage outwards	125
Salesmens salaries	800
Administrative wages and salaries	738
Land	100
Plant (includes 362,000 acquired in 20X1)	1,562
Motor vehicles	1,125
Goodwill	1,062
Distribution costs	290
Administrative expenses	286
Directors remuneration	375
Trade receivables	3,875
Cash at bank and in hand	1,750
	19,539		19,539
Note of information not taken into the trial balance data:
(a) Provide for:
(i) An audit fee of 38,000. (ii) Depreciation of plant at 20% straight-line. (iii) Depreciation of vehicles at 25% reducing balance. (iv) The goodwill suffered an impairment in the year of177,000. (v) Income tax of 562,000. (vi) Debenture interest of 25,000.

(b) Closing inventory was valued at 1,125,000 at the lower of cost and net realisable value.

(c) Administrative expenses were prepaid by 12,000.

(d) Land was to be revalued by 50,000.

Required:

(a) Prepare a statement of income for internal use for the year ended 31 December 20X1.

(b) Prepare a statement of comprehensive income for the year ended 31 December 20X1 and a statement of financial positionas at that date in Format 1 style of presentation.