The trial balance of Penang Co. on 31 July 20X7 was as follows.

The following additional information is available:
1. Inventory at 31 July 20X6 is valued at €1,361,000.
2. Depreciation for the year is to be charged using the straight-line method as follows:

3. A half-year’s debenture interest is to be accrued, as is the audit fee of €50,000.
4. Property taxes and insurance of €7,000 has been prepaid.
5. Taxation on the profits for the year is estimated at €80,000.
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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000 000 10% debentures Ordinary 1 share capital Share premium account Retained earnings 4,500 700 1,500 1,384 Dividend paid Buildings at cost 175 5,500 Equipment at cost Vehicles at cost Accumulated depreciation - buildings Accumulated depreciation - equipment Accumulated depreciation - vehicles Bank balance at 31 July 20X7 Inventory at 1 August 20X6 Purchases Sales 420 860 80 100 198 709 1,135 2,695 4,910 Delivery inwards 81 Debenture interest 75 Directors' remuneration 315 Discounts allowed and received 8 10 General expenses 28 Motor expenses 406 Property taxes and insurance 147 Returns inwards and outwards 20 15 Salaries and wages 312 Trade receivables 1,080 Trade payables 569 Total 13,966 13,966