The following is an extract from the trial balance of Imecet at 31 October 2005:

.:.

Other relevant information:

(i) One million $1 Ordinary shares were issued 1 May 2005 at the market price of $1.75 per ordinary share.

(ii) The inventor y at 31 October 2005 has been valued at $1,150,000.

(iii) A current tax provision for $350,000 is required for the period ended 31 October 2005 and the deferred tax liability at that date has been calculated to be $725,000.

(iv) The property has been further revalued at 31 October 2005 at the market price of $9,200,000.

(v) No depreciation charges have yet been recognised for the year ended 31 October 2005.

The depreciation rates are:

Factor y – 5% straight-line.

Administration building – 3% straight-line.

Deliver y vehicles – 25% reducing balance. The accumulated depreciation at 31 October 2004 was $10,000. There were no new vehicles acquired in the year to 31 October 2005.

Required:

(a) Prepare the Income Statement for Imecet for the year ended 31 October 2005.

(b) Prepare the statement of changes in equity for Imecet for the year ended 31 October 2005.