You have been asked to assist in the preparation of Willow's financial statements for the year ending

WILLOW
You have been asked to assist in the preparation of Willow's financial statements for the year ending
30 June 20X1 The entity's balance sheet as at 30 June 20X1 is shown below.

	Debit $000	credit$000
Authorized capital		50,000
Additional paid up capital		25,000
Revaluation reserve at 1 July 20X0		10,000
Land and structures - initial cost	120,000
Accumulated depreciation on 1 July 20X0		22,500
Machinery and equipment - original cost	32,000
Accumulated depreciation on 1 July 20X0		18,000
Trade and other receivables	20,280
Trade and other payables		8,725
5% bank loan maturing in 20X5		20,000
Cash and cash equivalents	2,213
Retained earnings at 1 July 20X0		12,920
Sales		100,926
Shopping	67,231
Selling expenses	8,326
Administrative expenses	7,741
Inventory at 1 July 20X0	7,280
Dividends paid	3,000

The following information is relevant to the preparation of financial statements:

i (i) Inventory at the close of business on June 30, 20X1 was $9,420,000.
ii (ii) Depreciation must be provided for the year before 30 June 20X1 as follows:
Buildings 4% per year Straight-line method
All this should be charged to administrative expenses.
Machinery and equipment 20% per annum.
The declining balance method is allocated as follows: Cost % 70
Distribution costs 20
Administrative expenses 10
(iii) A decision was made to write off $540,000 of debt, which will be charged to administrative expenses.
(iv) Included in selling expenses is $2,120,000 relating to an advertising campaign that starts on January 1, 20X1 and runs through December 31, 20X1.
(v) Interest on the loan has not yet been booked.
(vi) Tax collection for the year was calculated at $2,700,000.
Necessary:
Prepare a statement of profit or loss and other comprehensive income for Willow for the year ended 30 June 20X1 and a statement of financial position as at 30 June 20X1.