The following trial balance relates to Clarion as at 31 March 2015: $000 $000 Equity shares of $1 each (note (i)) 30,000 Retained earnings 1 April 2014 8,600 Other component of equity share premium (note (i)) 5,000 8% loan notes (note (ii)) 20,000 Plant and equipment at cost (note (iii)) 85,000 Accumulated depreciation plant and equipment 1 April 2014 19,000 Investments through profit or loss value at 1 April 2014 (note (iv)) 6,000 Inventory at 31 March 2015 11,700 Trade receivables 18,500 Bank 1,900 Deferred tax (note (vi)) 2,700 Trade payables 9,400 Environmental provision (note (iii)) 4,000 Finance lease obligation (note (iii)) 4,200 Revenue 132,000 Cost of sales 88,300 Operating lease payments (note (v)) 2,000 Administrative expenses 8,000 Distribution costs 7,400 Loan note interest paid 800 Suspense account (note (ii)) 5,800 Bank interest 300 Dividends paid 3,900 Investment income (note (iv)) 500 Current tax (note (vi)) 400 237,700 237,700 The following notes are also relevant: (i) The equity shares and share premium balances in the trial balance above include a fully subscribed 1 for 5 rights issue at $160 per share which was made by Clarion on 1 October 2014. The market value of Clarions shares was $250 on 1 October 2014. (ii) On 31 March 2015, one quarter of the 8% loan notes were redeemed at par and six months outstanding loan interest was paid. The suspense account represents the double entry corresponding to the cash payment for the capital redemption and the outstanding interest. (iii) Property, plant and equipment: Included in property, plant and equipment are two major items of plant acquired on 1 April 2014: Item 1 had a cash cost $14 million, however, the plant will cause environmental damage which will have to be rectified when it is dismantled at the end of its five year life. The present value (discounting at 8%) on 1 April 2014 of the rectification is $4 million. The environmental provision has been correctly accounted for, however, no finance cost has yet been charged on the provision. Item 2 was plant acquired with a fair value of $8 million under a five-year finance lease. This required an initial deposit of $23 million and annual payments of $15 million on 31 March each year. The finance lease obligation in the trial balance above represents the fair value of the plant less both the deposit and the first annual payment. The lease has an implicit interest rate of 10% and the asset has been correctly capitalised in plant and equipment. No depreciation has yet been charged on plant and equipment which should be charged to cost of sales on a straight-line basis over a five-year life (including leased plant). No plant is more than four years old. (iv) The investments through profit or loss are those held at 31 March 2015 (after the sale below). They are carried at their fair value as at 1 April 2014, however, they had a fair value of $65 million on 31 March 2015. During the year an investment which had a carrying amount of $14 million was sold for $16 million. Investment income in the trial balance above includes the profit on the sale of the investment and dividends received during the year. (v) Clarion renewed an operating lease on a property on 1 April 2014. The operating lease payments represent an annual payment (in advance) of $1 million and a lease premium of $1 million. The lease is for four years and operating lease expenses should be included in cost of sales. (vi) A provision for current tax for the year ended 31 March 2015 of $35 million is required. The balance on current tax in the trial balance above represents the under/over provision of the tax liability for the year ended 31 March 2014. At 31 March 2015, the tax base of Clarions net assets was $12 million less than their carrying amounts. The income tax rate of Clarion is 25%. Required: (a) Prepare the statement of profit or loss for Clarion for the year ended 31 March 2015. (b) Prepare the statement of changes in equity for Clarion for the year ended 31 March 2015. (c) Prepare the statement of financial position for Clarion as at 31 March 2015.