The SRM Company Ltd is a Hong Kong company, which was set up on 1st July 2017. Please use the following information to prepare the income statement for the year ended 31stDecember 2019, and the statement of financial position as at 31st December 2019. Please show your calculation with workings.

The SRM Company Ltd had the following items of income statement and statement of financial position on 31st December 2019:

Items HKD

Cash and equivalents 48,000

Notes payable 20,000

Revenues950,000

Long-term debt, excluding current portion 40,000

Accounts receivable 83,000

Provision for income taxes 42,000

Other fixed assets150,000

Interest expense 46,000

Dividend for the year 50,000

Bank borrowings (repay in year July 2021) 28,000

Purchase for re-sales290,000

Inventories 38,000

Prepaid expenses 25,000

Common stock (50,000 shares @ HKD1) 50,000

Property, plant, and equipment, at cost630,000

Accounts payable 25,000

Goodwill and trademarks235,000

Current portion of long-term debt 5,000

Provision for depreciation 50,000

Other incomes100,000

Selling and administrative expenses 225,000

Other expenses 45,000

Additional paid-in capital111,000

Additional information for SRM Company Ltd as at January 1, 2019:

Income taxes payable HKD40,000, retained earning HKD308,000, accumulated depreciation HKD200,000, inventories HKD50,000.

(Total 30 marks)