Xi Ltd
 Date: 31 December 2023

Trial Balance:

Description	Dr (£000)	Cr (£000)
Bank overdraft		95
Called-up share capital (ordinary shares of £1 each)		2,800
Accounts payable		125
Accounts receivable	105
Non-current assets: at cost	450
Accumulated depreciation (at 1 January 2023)		270
Marketing expenses	250
Office expenses	280
Retained profits (at 1 January 2023)		350
Production expenses	3,700
Purchases (net of VAT)	5,100
Sales (amounts invoiced, net of VAT)		10,200
Inventory (at 1 January 2023)	270
Trade accounts payable		300
Trade accounts receivable	3,800
Total	10,350	10,350

Additional Information:

1. Inventory at 31 December 2023 was valued at £310,000.
2. At 31 December 2023, £90,000 was owing for office expenses, and £80,000 had been paid in advance for marketing expenses.
3. A customer had gone into liquidation owing the company £440,000; the company does not expect to recover any of this debt.
4. The company decides to set up an allowance for doubtful debts amounting to 5% of the outstanding trade accounts receivable as at the end of each financial year.
5. Depreciation is to be charged on the non-current assets at a rate of 20% on cost; it is to be apportioned as follows:
   • Marketing: 30%
   • Office: 20%
   • Production: 50%

Note:
 There were no acquisitions or disposals of non-current assets during the year to 31 December 2023.

Required:
 Prepare Xi Ltd’s income statement for the year ending 31 December 2023, and a balance sheet as at that date.