show how income statement changes after implementation of RPI!

Linx Ltd started business on 1 January 2017. Linx issued for cash 200,000 ordinary shares of S1 for S1.2 and $100,000 of debentures at an interest rate of 12%. Debentures are paid in 2024 On 1 January 2017 Linx Ltd bought buildings for $120,000 and inventory for $80,000. On 1 March 2017 Linx Ltd bought equipment for $100,000. All these purchases were made in cash. The following transactions occurred evenly throughout the year Sales Wages Purchases $500,000 $20,000 $350,000 $100,000 Sundry expenses All of these were cash transactions except for one sale for S50,000 which took place on 30 June 2017; the trade receivable paid in full on 30 September 2017. The equipment has a useful economic life of 10 years with nil residual value, and it is depreciated on a straight-line basis. The building is depreciated on a straight-line basis at 5% per annum At 31 December 2017 inventories at cost were $150,000; they may be assumed to have been bought on average three months before the end of the year. Interest on debenture for the year was fully paid on 31 December 2017. During the year the RPI moved as follows: 1January 2017 1 March 2017 30 June (-average for year) 30 September 2017 31 December 2017 100 105 110 118 125 The requirement is to prepare an income statement for the year ended 31 December 2017, and a statement of financial position at that date, both stabilised in $ of 31 December 2017. Income Statement Particulars Revenue Amount ($) Sales Revenue Total Revenue 5,00,000 5,00,000 Expenses Cost of Goods Sold Depreciation Sundry Expenses Wages Total Expenses 2,80,000 14,333 1,00,000 20,000 4,14,333 Net Income 85,667 Statement of Financial Position Amount ($) Liabilities & Capital Common Stock 1,14,000 Additional Paid in Capital Retained earnings 91,667 Debentures 1,50,000 70,000 Assets Buildings Less: Accumulated Dep Equipment Less: Accumulated Dep Inventory Cash Amount (S) 2,00,000 40,000 85,667 1,00,000 120000 -6000 100000 -8333 4,25,667 4,25,667