Kyles Manog has taken the pop world by storm over the first six months of his career and has asked you to prepare some financial statements for that trading period.

Income

Kyles sold DVDs during the period and he is entitled to receive half of the retail price. of these monies had been received in cash during the six month period.

Kyles had made three appearances on MTV during the period earning in cash for each appearance.

In the final month of the period, he was the support artist for John Elton at the London Arena. This earned him but it will be at least another two months before he receives the cash.

Expenditure

Because of his popularity, Kyles had to hire a minder at the start of month The wages are per month but the minder is paid one month in arrears.

Travel costs for the six month period, all paid in cash, were

At the beginning of month Kyles invested in cash in a recording studio for his basement flat. Although technology continues to change rapidly, it is expected that Kyles will benefit from the studio for three years.

To generate publicity for his career, Kyles paid in month to the editor of Popteens Monthly This guaranteed Kyles a one page advert in the magazine for the whole year.

Tax

The Inland Revenue have been monitoring Kyles success and have advised the singer to provide for a tax charge of to cover the six month trading period.

Investment

Kyles two best mates from school provided the investment to get his career up and running. They set up KM Ltd by each buying ordinary shares in the company. They are not anticipating any dividends during the early trading periods.

Required

i Prepare an income statement for KM Ltd for the six month period weighting

ii Prepare a balance sheet for KM Ltd at the end of the six month period weighting