Part 1 – Financial Analysis Peter is a self employed music teacher and has the following trial balance: Trial Balance as at 30 June 2013 Debit Credit £ £ Instruments 1,500 Furniture 400 Rent for room 2,400 Computer 1,000 Fees from tuition 10,500 General expenses 1,000 Capital 3,550 Bank 1,500 Postage and stationery 50 Electricity 300 Advertising 300 Creditors 150 Debtors 350 Telephone 400 Drawings 5000 14200 14200 Note: In this case, there are no trading purchases. Required: 1) Prepare Peter Income Statement for the year ended 30 June 2013 and a Balance Sheet as at 30 June 2013. (30 marks) 2) Briefly research and discuss the changes in international regulation for reporting financial statements. In particular the changes to the names of profit and loss account. (20 marks) Part 2 – Performance Evaluation The comparative condensed income statements of SPENCER Corporation are shown below. SPENCER CORPORATION Comparative Condensed Income Statements For the Years Ended December 31 2013 2012 Net sales $620,000 $500,000 Cost of goods sold 450,000 400,000 Gross profit 170,000 100,000 Operating expenses 54,000 40,000 Net income $116,000 $ 60,000 Instructions (a) Prepare a horizontal analysis of the income statement data for SPENCER Corporation using 2013 as a base. (Show the amounts of increase or decrease.) (b) Prepare a vertical analysis of the income statement data for SPENCER Corporation in columnar form for both years. .