The following information has been taken from the accounts of Buttons Ltd for the year ended 30 September.

During the year a dividend of £120,000 was announced and paid.

Required:

(a) Prepare a value added statement for Buttons Ltd for the year ended 30 September.

(b) State and comment upon the reasons why a business may present a value added statement to its shareholders in addition to an income statement.

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Revenue 950,000 (220,000) (160,000) (95,000) (80,000) 395,000 Materials Wages and salaries Other expenses Depreciation Operating profit (45,000) 350,000 Interest Profit before taxation Taxation (110,000) 240,000 Profit for the year