Using the information provided below, you are required to prepare:

a) A Statement of Profit or Loss for the year ended 30 June 2021

b) A Statement of Financial position as at 30 June 2021

c) A Statement of Changes in Equity for the year ended 30 June 2021

d) Using a selection of ratios (about 5), analyse and comment briefly on the results of the first year's operations

The following Trial Balance (TB) and additional information as at 30 June 2021 have been extracted from the accounting books and associated records of LOTT plc ("LOTT"):

Notes / additional information

1. On 30 June 2021, the last day of the year, LOTT sold goods on credit for 900,000. The goods were sold at a mark-up of 20%. The goods were delivered on this date. The above trial balance has not been updated to reflect this sale, and closing inventory at point (6) below has not been adjusted for this transaction.

2. On 30/06/2021, equipment which had cost 600,000 on July 1st 2019 was sold off for 100,000. No aspect of this disposal has been reflected in the accounts above. The depreciation rate on equipment is 20% of cost. LOTT depreciates equipment from date of acquisition to date of disposal. There were no additions to equipment during the year ended 30 June 2021, and this was the only disposal.

3. No depreciation is charged on buildings, instead an annual revaluation is carried out at the end of each financial year. Due to surplus vacant commercial properties in the area, the value of properties similar to LOTT's is continuing to fall. Accordingly, the Board of Director's has decided to eliminate the buildings revaluation reserve.

4. The interest rate on the loan has been increased to 6% because LOTT did not pay any interest during the year. The loan is due for repayment in 5 equal annual instalments commencing on 31 August 2021.

5. On 31 December 2020, LOTT PLC paid rent covering 12 months to 31 December 2021 of 240,000. This transaction has not yet been recorded.

6. At the end of 30 June 2021:

• Closing inventories 2,200,000 (see note 1)
• Employees were owed 200,000 in salaries.
• Further bad debts amounting to 800,000 should be written off
• The bad debt provision at year ended 30 June 2021 should be adjusted to 10% of closing debtors
• Provide for unpaid loan interest
• Provide for corporation tax still outstanding
• Provide for a final dividend of 4cent per share

Assets and Income, liabilities Expenses and Equity '000 '000 2,000 400 360 16,000 10,000 200 1,800 2,400 1,200 200 240 Share capital - 1.00 shares (Authorised 2m shares; Issued im shares] Share Premium Retained earnings at 30/06/2020 Purchases / Sales Sales returns (already deducted from trade receivables) Opening Inventories - 01/07/2020 Trade Receivables (Debtors) / Trade payables (Creditors) Provision for bad & doubtful debts - 01/07/2020 Bad debts written off during 01/07/2020-30/06/2021 Salaries & other operating costs Equipment: cost (See note 2) Equipment: accumulated depreciation - 01/07/2020 Buildings (See note 3) Buildings revaluation reserve (See note 3) Bank Loan - @4% per annum interest rate (see note 4) Bank balance Corporation taxes paid (60% of the overall levy (charge) for year ending 30/06/2021} Interim dividends paid (6c per share) 2,600 4,000 1,600 4,600 1,000 5,000 1,200 600 120 27,760 27,760 Assets and Income, liabilities Expenses and Equity '000 '000 2,000 400 360 16,000 10,000 200 1,800 2,400 1,200 200 240 Share capital - 1.00 shares (Authorised 2m shares; Issued im shares] Share Premium Retained earnings at 30/06/2020 Purchases / Sales Sales returns (already deducted from trade receivables) Opening Inventories - 01/07/2020 Trade Receivables (Debtors) / Trade payables (Creditors) Provision for bad & doubtful debts - 01/07/2020 Bad debts written off during 01/07/2020-30/06/2021 Salaries & other operating costs Equipment: cost (See note 2) Equipment: accumulated depreciation - 01/07/2020 Buildings (See note 3) Buildings revaluation reserve (See note 3) Bank Loan - @4% per annum interest rate (see note 4) Bank balance Corporation taxes paid (60% of the overall levy (charge) for year ending 30/06/2021} Interim dividends paid (6c per share) 2,600 4,000 1,600 4,600 1,000 5,000 1,200 600 120 27,760 27,760