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could you show the statement of profit and lost and the statement of fincial position

CoursHeroTranscribedText: QUESTION 2 30 Marks The following trial balance relates to Farmers PLC, a listed company, at 31'it December 201 9: 000 000 Land and buildings at valuation 1 January 2019 180,000 Plant and equipment at cost (note (iv!) 200,000 Plant and equipment accumulated depreciation as at 1 25,000 January 2019 Capitalised Development Expenditure -1 January 2019 16,000 Accumulated amortisation on development expenditure 4,000 Inventory as at 3131 December 2019 59,?50 Trade receivables 43,?00 Bank 21,000 Trade payables 54,000 Deferred tax 20,000 Loan note (to be repaid in full on 31'It December 2033) 125,000 Equity shares of 1 each fully paid 50,000 Retained eamings at 1 January 2019 106,000 Revaluation surplus on land and buildings 16,000 Revenue 270,000 Cost of Sales 135,000 Administrative expenses 20,800 Distribution costs 16,000 Loan interest (note Q) 2,500 Income tax (note (ill) 250 Lease payments (note (ivj) 8,000 Research and development costs (note (iiiD 9,000 601,000 691,000 (i) The loan note was issued on 1"l April 2019 and should be treated as incun'ing an effective interest rate of 4% per annum. (ii) The balance of income tax in the trial balance represents the under/over provision of the previous year's estimate. The estimated income tax liability for the year ended 31st December 2019 is 13 million. At 31Sit December 2019 the tax written down value of the Plant and Equipment was 100 million. The rate of income tax is 30%. The movement in deferred tax should be taken to the statement of profit or loss. (iii) Amortisation of capitalised development expenditure is charged to cost of sales and calculated using the straight-line method at 15% of the cost of capitalised development emenditure per annum. Research and development expenditure is charged to cost of sales. In order to remain competitive Farmers needs to develop new products and has therefore undertaken a new project during the year. The research and development costs of 9 million were incurred at the rate of 750,000 per month. The project was in a research phase until 3131 March 2019. On 1*'July 2019, the Board of Directors reached the opinion that the new product would be viable and highly profitable. The project remained in development as at 31"" December 2019. (W) (V) (Vi) During the year Farmers manufactured a specialist production line in order to expand the operating capacity of the company. The new production line was completed and put into immediate use on 1'It April 2019. The costs of manufacture of the production line were as follows: 000 Direct materials costs 16,000 Direct labour costs 10,000 Directiy attributable overhead costs 10,000 The costs of manufacture of the new production line have been included in cost of sales. In addition, Farmers acquired a second new production line on 1'" January 2019 under a nance lease. The interest rate implicit in the lease was 8%. Discount and annuity factors are as follows: Discount factor Annuity n 8% interest 8% interest 1 0.9259 0.9259 2 0.8573 1.783 3 0.7938 2.5?7 4 0.7350 3.312 5 0.6806 3.9926 The total lease payments of 8 million showed in the trial balance comprise E 4 million deposit paid on 13' January 2019 (the commencement date) and the first annual lease payment of 4 million paid on 31'il December 2019. Under the terms of the nance lease agreement, annual payments of E 4 million will be made on 31 December each subsequent year for the next 4 years. The value of the right-of- use asset should be recognised using the present value of future lease payments falling due after the commencement date, as dened in IFRS 16. All plant and equipment (including production lines) is depreciated at 20% per annum on a reducing balance basis. Depreciation should be charged to cost of sales and where appropriate, time apportioned. Farmers re-values its land and buildings at the end of each accounting year. The valuation for land and buildings shown in the trial balance includes land at a valuation of 40 million. The estimated remaining life of the buildings as at 1 January 2019 was 10 years. On 31 December 2019, the professional valuation statement valued the buildings at 116 million. The value of the land was considered to be unchanged. (Do not attempt to calculate deferred tax on the revaluation). Depreciation on buildings is charged 40% to cost of sales and 30% to each of distribution costs and administrative expenses. Required: (a) Prepare the Statement of Prot and Loss for the year ended 31"11 December 2019. 14 Marks (b) Prepare the Statement of Financial Position as at 31 December 2019 16 Marks Turn over

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