The balances below have been extracted from the accounting records of Novena Shirts Limited at 31 December 20X3:

SALDOS AJUSTES SALDO AJUSTADO

DETALLE
DEUDOR ACREEDOR DEBE HABER DEUDOR ACREEDOR
REVALUATION RESERVE $ 55,000
RETAINED PROFITS AT 1.1.13 $ 26,200
SHARE CAPITAL:
SHARE CAPITAL: 200.000 ORDINARY SHARES OF 10C EACH $ 20,000
10.000 8% CUMULATIVE $1 PREFERENCE SHARES $ 10,000
LAND & BUILDING: AT VALUATION $ 140,000
LAND & BUILDING: ACCUMULATED DEPRECIATION $ 18,000
SHARE PREMIUM $ 22,000
6% DEBENTURE LOAN 2020 $ 80,000
PROVISION FOR DOUBTFUL DEBTS $ 1,800
PLANT & MACHINERY: COST $ 320,000
PLANT & MACHINERY: ACCUMULATED DEPRECIATION $ 210,000
INTERIM DIVIDEND PAID ON ORDINARY SHARES $ 4,000
INTERIM DIVIDEND PAID ON PREFERENCE SHARES $ 400
CORPORATION TAX $ 2,200
DEBENTURE INTEREST $ 2,400
INVENTORY AT 1.1.13 $ 35,000
TRADE RECEIVABLES $ 65,000
BANK ACCOUNT $ 14,100
PREPAID INSURANCE AT 1.1.13 $ 1,400
ACRUED ELECTRICTY AT 1.1.13 $ 6,000
TRADE PAYABLES $ 17,000
NON- CURRENT ASSET DISPOSAL PROCEEDS $ 2,200
SALES $ 928,800
PURCHASES $ 396,000
WAGES AND SALARIES $ 367,000
INSURANCE $ 13,200
TRAVEL AND ENTERTAINMENT $ 21,000
PROFESSIONAL FEES $ 14,500
ELECTRICITY $ 29,000

$ 1,411,100 $ 1,411,100
You are given the following information:
1. Inventory at 31 December 20X3 cost $47,000. Included in this inventory are items that cost $1,400 and which are now obsolete and
are expected to be sold for $200.
2. The land and buildings, at valuation, comprise: land $80,000, buildings $60,000. The land is to be revalued to $250,000.
3. Prepaid insurance at 31 December 20X3 is $1,700 and accrued electricity, at that date, is $5,500.
4. An item of plant and machinery, the cost of which had been $5,000 and whose net book value was $2,300, had been sold in the year
for $2,200. No accounting entries relating to the disposal have been made in the company’s books of account other than in relation to
the disposal proceeds.
5. Depreciation on fixed assets is to be charged as follows: Freehold land: No depreciation is charged. Buildings: 1 per cent per annum
on a straight-line basis Plant and machinery: 30 per cent per annum on a reducing balance basis
6. A bad debt of $3,000 is to be written off.
7. The provision for bad debts is to be revised to 4 per cent of trade receivables.
8. A final dividend of 3c per ordinary share is to be proposed by the directors.
9. The dividend on the cumulative preference shares, due to be paid on 1 January 20X4, is to be provided.
10. Corporation tax of $20,000 on the current year’s profits is to be provided.
11. Interest on the debentures due to be paid on 1 January 20X4 is to be provided.
Required
An income statement for the year ended 31 December 20X3, a statement of financial position at that date, and a statement of
movements in equity note for 20X3, all in good style, for the directors.