You have been given the trial balance for Monet plc together with the following information and been asked to prepare the financial statements for the year ended 30^th June 2020.

The following information is also provided:

1. On 1^st July 2019 Monet had a 1 for 10 rights issue at a price of 2.50. The rights were fully subscribed. The cash was correctly posted but the other side of the entry was taken to suspense. On 28^th June 2020 the company then had a 1 for 20 bonus issue to utilise some of the share premium account. No entries have yet been made to reflect the bonus issue.

2. Closing inventory on site was initially valued at a cost of 168,430. Included within that figure are some items that cost 4,500. Due to obsolescence the sales director estimated at the reporting date that these would be sold for 2,500. On 13^th July 2020, before the financial statements were approved, these items were sold for 1,800.

3. The tax expense for the year is 38,390. The balance on the trial balance represents an underprovision of the previous years tax liability.

4. The deferred tax liability needs to be decreased to 51,650.

5. On 1^st July 2019 Monet plc disposed of some old machinery for 1,250. The machinery had a cost of 9,000 and accumulated depreciation of 6,915. The only entries Monet plc has made so far with respect to this transaction are to credit the disposals account and debit administrative expenses. Any profit or loss on disposal should be posted to cost of sales.

6. Plant and machinery is depreciated at 10% reducing balance. All depreciation should be charged to cost of sales. The factory depreciation has already been calculated and reflected in the trial balance.

7. During February 2020 the heating in the warehouse broke down and Monet had to hire some industrial heaters for two weeks at a total cost of 850. The cost was posted to administrative costs.

8. Monet plc sold goods to Haystack Ltd on a sale or return basis on 21^st June 2020. The value of the sale was 6,500 but Haystack Ltd had up to 3 months to return the goods. Historically Haystack returns 10% of goods sold on this basis. The cost of the goods transferred was 3,800. The only entry made was to recognise the 6,500 cash received and credit the full amount to revenue.

9. On 1^st July 2019, Monet issued 120,000 of 5 year bonds for 105,000 before allowing for 5,000 of issue costs. The bond carries a coupon rate of 2.95% and has an effective interest rate of 7%. The 105,000 was recorded in the trial balance and debited to the cash account. No further entries have yet been made with respect to this loan.

10. On 14^th July 2020 an employee lost a toe when a fork lift truck ran over his foot in the factory. The directors raised a provision of 6,400 on legal advice in order to be prudent as it was likely that the employee would sue for compensation.

Requirements

Taking into account all the information provided:

1. Prepare a Statement of profit or loss for the year ended 30^th June 2020

2. Prepare a Statement of changes in equity for the year ended 30^th June 2020

3. Prepare a Statement of financial position as at 30^th June 2020

Trial Balance as at 30th June 2020 500,000 600,000 800,000 180,000 3,069,015 1,050,952 180,000 164,725 16,500 Share capital (1) Share premium account Factory cost Factory depreciation as at 30.6.20 PPE cost PPE accumulated depreciation at 30.6.19 Opening inventory Trade receivables Bank Trade payables Loan Deferred tax Revenue Raw material purchases Production costs Administrative costs Distribution costs Factory depreciation Dividend Income tax Provision for loss of toe Disposal proceeds Suspense 175,905 105,000 65,000 1,370.691 403,585 157,150 360 205 94.790 20.000 30,000 6,020 6,400 1,250 125,000 4,180,198 1,121,792 Retained earnings b/f 5,301,990 5,301,990