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The following trial balance has been prepared for Vale Ltd as at 3 1 December 2 0 2 3 . Except where stated, the additional

The following trial balance has been prepared for Vale Ltd as at 31 December 2023. Except where stated, the additional information has not been accounted for in the trial balance. NotesSales 13,083,000Purchases 7,084,100 Staff wages and salaries(2)3,913,800 Distribution costs 824,600 Interest paid on a bank overdraft 2,320 Inventories at 31 December 2022518,200 Trade receivables 2,663,400 Allowance for receivables at 31 December 2022(3)173,700Land and buildings(4) Cost (land at 3,250,000)5,250,000 Accumulated depreciation at 31 December 2022560,000Plant and equipment(4) Cost 2,100,000 Accumulated depreciation at 31 December 20221,450,000Retained earnings at 31 December 20222,658,020Ordinary share capital (0.25 shares)(5)2,000,000Share premium 500,000Trade payables 1,467,700Financial liability (4%1 preference shares)(5)400,000Bank 64,00022,356,42022,356,420 Additional information (1) Vale Ltd uses the average cost method to value inventories. On 31 December 2023, Vale Ltd had the following inventories: ProductInventoriesIn unitsAverage cost per unitCL122,5009.90JP143,2008.00 Included within the total inventories of JP1 are 1,000 units which are damaged and which can only be sold for 1.(2) Staff wages and salaries should be allocated 60% to cost of sales and 40% to administrative expenses. (3) The allowance for receivables at 31 December 2023 should be 204,300. This figure has been correctly calculated but the change in the allowance for receivables has not yet been recorded. Changes in the allowance for receivables should be presented in administrative expenses. (4) No accounting entries have been made for depreciation for the year ended 31 December 2023. Buildings are depreciated over a useful life of 25 years using the straight line method with a residual value of zero. Depreciation on buildings should be presented in administrative expenses. Depreciation on plant and equipment is calculated using a reducing balance of 25%. Depreciation on plant and equipment should be presented in cost of sales. (5) During the year, Vale Ltd issued the following shares: Ordinary shares: on 21 December 2023, Vale Ltd issued 800,000 new 0.25 ordinary shares for cash at a market value of 0.30 per share. No accounting entries have been made for this transaction. Preference shares: on 1 January 2023, Vale Ltd issued 400,000 of 14% redeemable preference shares which are measured at amortised cost. The preference shares were issued at par for cash proceeds of 400,000. The effective interest rate is 5.6%. Vale Ltd paid the 4% coupon on 31 December 2023. Cash proceeds were correctly debited to bank and credited to financial liabilities. No accounting entries have been made to record the interest charged or the coupon payment. Note: the trial balance of Vale Ltd currently shows bank as a credit balance which indicates use of a bank overdraft. (6) Tax for the year has been estimated at 240,000. REQUIRED: Prepare for Vale Ltd, a statement of profit or loss for the year ended 31 December 2023 and a statement of financial position at that date.

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