Nelson Ltd was incorporated in 2003 with an authorised share capital of 500,000 £1 ordinary shares, and 200,000 5 percent cumulative preference shares of £1 each. The following trial balance was extracted as at 31 May 2020:

Additional information:
1. Inventory at 31 May 2020 was valued at £195,000.
2. Administrative expenses owing at 31 May 2020 amounted to £13,000.
3. Depreciation is to be charged on the furniture and fittings at a rate of 12.5 per cent on cost.
4. Salaries paid in advance amounted to £4000.
5. Corporation tax owing at 31 May 2020 is estimated to be £8000.
6. Ordinary dividend was declared just before the year end of 1.25p per share. That remains to be paid.

Required:
Prepare Nelson Ltd’s trading and statement of profit or loss and statement of retained earnings for the year to 31 May 2021 and a statement of financial position as at that date.

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Administrative expenses Auditor's fees Cash at bank and in hand Payables Debentures (12%) Debenture interest paid Receivables Directors' remuneration Dividends paid: Ordinary interim Preference Furniture, fittings and equipment: At cost Accumulated depreciation at 1.6.20 Investments at cost (market value at 31.5.20: £340000) Investment income Ordinary share capital (issued and fully paid) Preference shares Retained earnings (at 1.6.20) Dr £ 257000 10000 5000 6000 225000 60000 20000 5000 200000 335000 Cr £ 85000 100000 48000 22000 400000 200000 17000