The following trial balance was extracted from the books of Rinsed Ltd as at 31 December 20X5.

The following trial balance was extracted from the books of Rinsed Ltd as at 31 December 20X5.

Rinsed Ltd. - Trial Balance at 31 December 20X5	'000	'000
Sales		19,600
Purchases	11,400
Selling and Distribution expenses	2,940
Administration expenses	1,960
Plant and Machinery - Cost	2,434
Plant and Machinery - Depn at 1st Jan 20X5		634
Inventory at 1st January 20X5	1,781
Brand costs - Synths project	747
Licence costs - Woollens	500
Patent	250
Research and Development	1,525
Bank Account		725
Share Capital - Ordinary shares of 25p each		1,000
Share Premium		500
Retained Earnings		2,469
Receivables	3,267
Payables		1,901
Finance costs	25
Totals	26,829	26,829

The following matters have not been taken into account in the preparation of the above trial balance and must be considered and appropriate adjustments made in the preparation of the financial statements.

All figures below are 000 unless stated

1. Closing Inventory

An inventory count indicates the valuation to be 1,963.

1. Brand costs Synths Project

The costs of 747 accumulated to this cost centre during the year are for a major brand campaign for a product to be launched during 20X6. The directors would like to treat these costs as an intangible asset on the statement of financial position and then amortise the asset over the life of the product. The economic life is estimated to be 6 years

1. Licence costs Woollens

These costs relate to the acquisition of an exclusive licence to market and sell the Woollens branded products. It was purchased from a company called Heavy Ltd at the end of 20X5. The agreement is for 5 years.

1. Patent

Rinsed registered a patent at the beginning of 20X5 relating to some of their technology. It has a life of 10 years.

1. Research and Development

The research and development costs of 1,525 in the year relate to 2 projects, Nylon and Cotton;

1. Nylon is a new project this year. The product is technically proven.

However there is still some doubt over whether it is commercially viable. Expenditure in 20X5 on Nylon was 625.

1. Cotton relates to a new product that has gone into production in the year. Sales to date are significantly above plan and latest projections are that the product will generate enough revenue to more than cover the costs of development. In 20X5 the development costs were 900. Cotton went into production on the 1^st July and it is estimated that the commercial life is 10 years.

All costs in relation to intangible asset issues are allocated to Selling and

Distribution expenditure when charged to the Statement of Profit or Loss.

1. Depreciation

Plant and machinery is to be depreciated at 20% on a reducing balance basis and the charge allocated to expenses as follows

Cost of Sales 60%

Sales and Distribution Expenses 20%

Administration Expenses 20%

1. The tax charge on the profits for the year has been calculated at 350.

REQUIRED:

1. Prepare a Statement of Profit or Loss for the year ended 31 December 20X5

1. Prepare a Statement of Changes in Equity at 31 December 20X5

1. Prepare a Statement of Financial Position as at 31 December 20X5