The balances below have been extracted from the accounting records of Moscow Ltd at 31 December 2021: Dr Cr f 238.000 2,123,000 2,000,000 8,000,000 2,000,000 3,750,000 2,340,000 520,000 450,000 38,000 Bank account Retained profits at 1 January 2021 Freehold land Buildings: cost Buildings: accumulated depreciation at 1 January 2021 Plant & machinery: cost Plant & machinery: accumulated depreciation at 1 January 2021 Trade payables Trade receivables Return outwards Inventory at 1 January 2021 Revenue Purchases 8% Debenture loan: repayable in 2026 Debenture interest Return inwards Distribution costs Administrative expenses Prepayment on building insurance at 1 January 2021 Ordinary share capital 267,000 5,006,000 3,200,000 2,000,000 80,000 66,000 382,000 514,000 80,000 5,000,000 19,027,000 19,027,000 You are given the following information: 1. Inventory at 31 December 2021 cost 300,000. This includes some slow-moving items which cost 18,000 which would normally sell for 22,000 but which the directors have decided to sell at 15,000 to clear them. 2. The land was purchased in 2016 for 2,000,000. It was externally valued for the company by a professional appraiser at 4,000,000 on 31 December 2021. 3. In December 2021, the company sold a piece of machinery for 10,000. The machinery which was sold had been purchased in 2019 for 30,000. Neither the sale nor the proceeds of sale have been accounted for in the accounting records of the company. 4. The company's depreciation policy is to provide a full year's depreciation in the year of acquisition and no depreciation in the year of disposal with the following rates applicable to the non-current assets: Freehold land - no depreciation required. b. Buildings - 2% per year on a straight-line basis. Plant and machinery - 10% on a reducing balance method. 5. A bad debt of 20,000 is to be written off. 6. The figure for prepayments at 1 January 2021 in the trial balance is in respect of two months' building insurance paid in advance. On 1 November 2021, the company paid insurance premium for its buildings of 300,000 for six months, in advance. This amount was included in administrative expenses. 7. Any unpaid interest on debentures has yet to be accrued for. Required: Prepare an income statement for Moscow Ltd for the year ended 31st December 2021 and a statement of financial position at 31 December 2021 for the directors. a. c