“The following trial balance relates to Glory plc at 31 December 2020:”

	“£000”	“£000”
“Leasehold property – at valuation 31 December 2019 (Note (i))	25,200
Plant & equipment (owned) at cost (Note (ii) & (iv))	46,800
Accumulated depreciation
- Owned plant & equipment		12,800
Finance lease payments (Note (iii))	10,128
Inventory (Note (vi))	29,400
Trade receivables & payables	39,100	35,000
Bank		4,928
Revenue (Note (v))		310,000
Purchases (Note (v))	234,500
Distribution costs	19,500
Administrative expenses	27,500
Preference dividend paid	1,200
Equity dividend paid	2,000
Equity shares of 50p each		25,000
6% £1 preference shares (Note (ix))		40,000
Retained earnings		4,900
Current taxation	700
Deferred taxation		3,400
	436,028	436,028”

“The following notes are relevant:”

“(i)      The leasehold property was acquired on 1 January 2019 at a cost of £30,000,000. The lease was for 15 years at that date. Glory plc’s accounting policy is to revalue the property at market value at each year-end. The valuation in the trial balance of £25,200,000 as at 31 December 2019 led to an impairment charge of £2,800,000, which was reported in the Income Statement for the year ended 31 December 2019. At 31 December 2020 the property was valued at £24,900,000.”

“(ii)     Owned plant & equipment is depreciated at 25% per annum on a reducing balance basis.”

“(iii)    Plant & equipment was acquired under a finance lease on 1 January 2020. The rentals are an initial £4,128,000 payable on 1 January 2020, followed by £6,000,000 per annum for four years payable annually in arrears. The interest rate implicit in the lease is 8% per annum. Leased plant & equipment is to be depreciated at 25% per annum on the straight line basis. Only the payments of £4,128,000 on 1 January 2020 plus £6,000,000 on 31 December 2020 have been reflected in the trial balance above.”

“(iv)    No depreciation has been charged on the non-current assets for the year ended 31 December 2020. All depreciation is charged to Cost of Sales.”

“(v)     Glory plc’s revenue includes £8,000,000 for goods it sold acting as an agent for another company. Glory plc earns commission of 20% on these sales. The balance of £6,400,000 (which has been included in Cost of Sales) has been paid to the other company.”

“(vi)    Closing inventories as at 31 December 2020 have been valued at £28,200,000.”

“(vii)   The estimated current taxation charge for the year ended 31 December 2020 is £4,500,000. The balance of current taxation in the trial balance represents the over/under provision of the current taxation charge for the year ended 31 December 2019. No taxation has been paid in respect of the year ended 31 December 2020.”

“(viii) Glory plc receives capital allowances on the plant & equipment that it owns. As at 31 December 2020 the tax written down value of its owned plant & equipment, as shown in its draft corporation tax computation for the year ended 31 December, amounted to £15,500,000. The current rate of corporation tax is 20% and this is expected to remain unchanged for the foreseeable future.”

   

“REQUIRED:

Prepare the Statement of Comprehensive Income for the year ended 31 December 2020 together with a Statement of Financial Position as at that date, in compliance with IAS 1.

Notes to the financial statements showing movements in retained earnings and narrative disclosures are required, but Accounting policy Notes and numerical analysis Notes are not required.