The trial balance for Oslo Co. on 31 July 20X7 is given below.

The following additional information is relevant.
1. Closing inventory is valued at €180,000.
2. An allowance for doubtful debts is to be made of 1 per cent of the receivables figure.
3. Taxation on the current year’s profits is estimated at €17,000.
4. Depreciation is to be provided at 2 per cent of cost of freehold buildings, 20 per cent of cost of motor vehicles and 10 per cent of cost of equipment.
5. Lighting and heating of €500 is to be accrued and rent of €1,000 has been paid in advance.
6. Interest on debentures for the year ended 31 July 20X7 was paid on 6 August 20X7. No accrual has yet been made.
7. The final preference dividend of 4 per cent is outstanding at 31 July X7.
You are required to:
■ prepare an income statement for the year ended 31 July 20X7 and a balance sheet as at that date.

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000 Ordinary 1 share capital 8% preference shares Share premium account 000 200,000 100,000 20,000 Retained earnings at 1 Aug X6 100,000 5% debenture stock 160,000 Dividend paid 8,000 Freehold buildings - cost 320,000 Accumulated depreciation - buildings 108,800 Motor vehicles - cost 312,000 Accumulated depreciation - vehicles 56,000 Equipment 60,000 Accumulated depreciation - equipment 36,000 Trade receivables and payables 120,000 96,000 Inventory at 1 August 20X6 165,000 Cash at bank Cash in hand 48,400 10,400 Purchases 850,000 Sales Bad debts 1,244,000 6,000 Delivery cost inwards 5,000 Delivery cost outwards 7,000 Rent 10,000 General administrative expenses 80,000 Gas, electricity and water 9,000 General selling expenses 114,000 Total 2,120,800 2,120,800