Topcow (Pty) Ltd presented the following details with the trial balance for the year ended 31 December 2021. You have been asked to help prepare the financial statement for them.

Trial balance as at 31^st December 2021

	Debit	Credit
	£000	£000
Share capital		18,000
Trade and other payables		2,694
Property, plant and equipment – cost	79,760
Property, plant and equipment – accumulated depreciation at 31st December 2021		43,560
Trade and other receivables	4,468
Accruals		292
8% bank loan repayable 2028		28,000
Cash at bank	19,308
Retained earnings at 1st January 2022		6,930
Interest	1,120
Sales		92,866
Purchases	65,106
Distribution costs	4,900
Administrative expenses	6,888
Inventories as at 1st January 2022	8,932
Dividends paid	1,860
	192,342	192,342

Additional data:

· The inventories at the close of business on 31^st December 2021 were valued at

£9, 974, 000. On 15^th January 2022, goods included in this total at a value of £1,100, 000

were found to be damaged and were sold for £600,000.

· Land, which is non-depreciable, is included in the trial balance at a value of

£8,000,000. It is to be revalued at £12,000,000 and this revaluation is to be included

in the financial statements for the year ended 31st December 2021.

· The company paid £1,124, 000 for one year’s insurance on 1^st April 2021, this is due

to expire on 31^st March 2022. Insurance is included in administrative expenses.

· Distribution costs of £132,000 owing at 31^st December 2021 are to be accrued.

· Interest on the bank loan for the last six months of the year has not been included in

the accounts in the trial balance.

· The tax charge for the year has been calculated as £1, 960,000.

· All of the operations are continuing operations.

Required

(a) Draft the statement of profit or loss and other comprehensive income for Topcow Ltd for the year ended 31^st December 2021. 

(b) Statement of Financial position for the year ended 31^st December 2021.

Answer rating: 100% (QA)

a Statement of Profit or Loss and Other Comprehensive Income for the year ended 31st December 2021 I... View the full answer