Question 17 The statements of financial position of Grace Ltd at 31 December 2019 and 2018 and a summary of the income statement for the year ended 31 December 2019 are as follows: Statement of financial position as at 31 December Non-current assets 2019 2018 $000 $000 Land and buildings 42,000 37,000 Plant and machinery 18,500 16,500 Investment at cost 6,200 6,000 66.700 59.500 Current Assets Inventory 12,281 11,062 Receivables 10,987 12,784 Prepayments 150 350 Cash at bank 0 4.713 23.418 28.909 Total assets 90.118 88.409 Liabilities and equity Current Liabilities Bank overdraft Trade payables Corporation tax Interest payable 1,490 0 10,713 9,812 3,000 4,000 2.500 2,000 17,703 15,812 10% Debentures 2.800 13.000 Total liabilities 20,503 28.812 Equity $1 ordinary shares Share premium Revaluation reserve Retained profits Total liabilities and equity 13 33,000 24.000 2,000 6,000 5,000 3,000 29.615 26.597 69.615 59.597 90.118 88.409 Summary Income Statement for the Year Ended 31 December 2019 Profit before tax (after depreciation on plant and machinery of $2,400,000) Tax Profit after tax $000 10,518 2,000 8518 You are given the following information: (1) (2) During the year certain items of machinery were disposed of for $2,200,000. The machines had originally cost $4,000,000 and had a net book value at the disposal date of $2,000,000. On 1 January 2019, a bonus issue of 1 for 3 was made on the ordinary shares, utilizing the share premium account, at that date, together with retained profits (3) A further share issue occurred during the year. (4) Included in the profit before tax is investment income of $1,250,000 and interest expenses of $5,100,000. (5) Dividends paid in the year were $3,500,000 (2018: $3,000,000)