HK Ltd has prepared its draft trial balance to 30 June 20X1, which is shown below.

The following information is available:
(a) The authorised share capital is 4,000,000 9% preference shares of $1 each and The authorized share capital is 4,000,000 9% preference shares of $1 each and 18,000,000 ordinary shares of 50c each.
(b) Provide for depreciation at the following rates:
(i) Plant and machinery 20% on cost
(ii) Fixtures and fittings 10% on cost
(iii) Buildings 2% on cost
Charge all depreciation to cost of sales.
(c) Provide $5,348,000 for income tax.
(d) The loan was raised during the year and there is no outstanding interest accrued at the year-end.
(e) Government grants of $85,000 have been received in respect of plant purchased during the year and are shown in the trial balance. One-fifth is to be taken into profit in the current year.
(f) During the year a fire took place at one of the company€™s depots, involving losses of $200,000. These losses have already been written off to cost of sales shown in the trial balance. Since the end of the financial year a settlement of $150,000 has been agreed with the company€™s insurers.
(g) $500,000 of the inventor y is obsolete. This has a realizable value of $250,000.
(h) Acquisitions of property, plant and equipment during the year were:
Plant $173,000
Fixtures $144,000
(i) During the year freehold land which cost $720,000 was sold for $1,316,000.
(j) A final ordinary dividend of 3c per share is declared and was an obligation before the year-end, together with the balance of the preference dividend. Neither dividend was paid at the year-end.
(k) The goodwill has not been impaired.
(l) The land was revalued at the year end at $2,500,000.

Required:
(a) Prepare the company€™s statement of comprehensive income for the year to 30 June 20X1 and a statement of financial position as at that date, complying with the relevant accounting standards in so far as the information given permits.
(b) Explain the usefulness of the schedule prepared in(b).

Trial balance at 30 June 20X1 $000 $000 Freehold land Freehold buildings (cost $4,680) Plant and machinery (cost $3,096) Fixtures and fittings (cost $864) 2,100 4,126 ,858 7,263 Trade receivables Trade payables Inventory Bank balance Development grant received Profit on sale of freehold land 2,591 1,794 11,561 536 381,600 Cost of sales Administration expenses Distribution costs Directors' emoluments Bad debts Auditors remuneration Hire of plant and machinery Loan interest Dividends paid during the year - preference Dividends paid during the year- ordinary 9% loan Share capital - preference shares (treated as equity) Share capital - ordinary shares Retained ear nings 318,979 35,100 157 2,400 162 2 426 7,200 3,600 5,400 6,364 407,376 407,376