You have been provided with the following trial balance as at 31 May 2020 for a limited liability company called Boton Chophouse.

	Dr	Cr
	$000	$000
Bank	50
Inventory at 1 June 2019	1,200
General expense	600
Heating and lighting	90
Marketing and advertising expenses	248
Wages	490
Building at cost	5,000
Motor vehicles at cost	160
Plant and equipment at cost	700
Retained earnings at 1 June 2019		280
Accounts receivable	438
Purchases	2,200
Loan note interest paid	30
5% Loan note		600
Revenue		5,876
Discount received		150
Accounts payable		500
$1 Common Shares		1,500
Accumulated depreciation at 1 June 2019
Buildings		2,000
Motor vehicles		60
Plant and equipment		240
	11,206	11,206

The following notes are relevant:

1 Inventory at 31 May 2020 was valued at $800,000

2 Marketing and advertising expenses include $6,000 paid in advance for a marketing campaign which will begin in June 2020. Marketing and advertising expenses should be allocated to administrative expenses.

3 There are wages outstanding of $10,000 for the year ended 31 May 2020.

4 A customer ceased trading owing the company $38,000; the debt is not expected to be recovered.

5 An allowance for doubtful debts is to be established amounting to 5% of accounts receivable.

6 Depreciation is to be provided for as follows:

(i) Buildings at 5% per annum on their original cost, allocated 50% to cost of sales, 20% to distribution costs and 30% to administrative expenses.

  (ii) Motor vehicles at 25% per annum of their carrying value, allocated to distribution costs..

  (iii) Plant and equipment at 20% per annum of their carrying value, allocated to cost of sales.

7 No dividends have been paid or declared.

8 Income tax of $250,000 is to be provided for the year.

9 The audit fee is estimated to be $20,000.

10 The expenses listed below should be apportioned as follows:

	Cost of sales	Distribution Costs	Administrative Expenses
General expenses	10%	40%	50%
Heating and lighting	50%	30%	20%
Wages and salaries	60%	30%	10%

Required:

Prepare the following financial statements for the year ended 31 May 2020 for Boton Chophouse in accordance with IAS 1 Presentation of Financial Statements:

(i)  A statement of profit or loss

(ii)  A statement of financial position

You are required to show workings where appropriate as notes.