You have been provided with the following two draft statements, Statement of Financial Position (SOFP) and Statement of Comprehensive Income (SOCI) of APP Ltd for the year ended 30 June 2022 and additional information that have been prepared by the bookkeeper, Victor.

Statement of Financial Position as at 30 June 2022 For the year ended 30 June 2022 ($ 000) 2021 ($ 000) Assets Cash 2,050 1,950 Accounts receivable 16,785 19,670 Inventory 18,500 18,800 Prepaid Insurance 3,500 3,000 Non-current assets 25,500 25,000 Total assets 66,335 68,420 Liabilities Accounts payable 15,237 13,240 Rent Payable 2,500 3,000 Provision 1,650 1,250 Interest Payable 550 250 Long-term bank loan 12,000 12,250 Total liabilities 31,937 29,990 Net assets 34,398 38,430 Shareholders' equity Share capital 32,500 30,500 Retained earnings 1,898 7,930 Total shareholders' equity 34,398 38,430

Statement of Comprehensive Income for the year ended 30 June 2022 2022 ($ 000) Sales 33,250 Less: Cost of Goods Sold 14,500 Gross profit 18,750 Revaluation Gain of Land (net of tax) 500 Income from discontinued operations 1,650 Less: Expenses Operating Expenses 9,500 Depreciation 4,620 Expenses - discontinued operations 1,520 Interest paid 3,290 Total operating expenses 18,930 Net profit after tax 1,970

Additional information: (i) Non-current assets consist of Property plant & Equipment of $18.5 Million and Intangible assets of $7 Million as at 30 June 2022. As at 30 June 2021, Non-current assets consist of Property plant & Equipment of $20.5 Million and Intangible assets of $4.5 Million

(ii) Income tax expense for the current year was $2,500,000 and it has been included under operating expenses.

(iii) Income tax payable as at 30 June 2022 has been included under Accounts Payable and the amount was $3,410,000. As at 30 June 2021, there was no income tax payable. Nicole seeks your help to finalise the above two financial statements that are prepared by Victor.

Required: Referring to NZ IAS 1, identify the principles that Victor has violated in preparing the Statement of Financial Position and Statement of Comprehensive Income, and explain how each violation can be rectified and presented correctly in these financial statements to meet NZ IAS 1 requirements. Support your discussion with relevant paragraphs of NZ IAS 1