The following trial balance has been extracted from the books of Keith Ltd as at 30 June 2020:

Additional information:
1. Inventory at 30 June 2020 valued at cost amounted to £155,000.
2. Depreciation is to be provided on machinery and vehicles at a rate of 20 per cent and 25 percent, respectively, on cost.
3. Accrual is to be made for auditors’ remuneration of £12,000.
4. Insurance paid in advance at 30 June 2020 amounted to £3000.
5. The allowance for doubtful debts is to be made equal to 5 per cent of outstanding trade receivables as at 30 June 2020.
6. Corporation tax owing at 30 June 2020 is estimated to be £60,000.
7. An ordinary dividend of 10p per share is declared just before the year end.
8. The investments had a market value of £30,000 at 30 June 2020.
9. The company has an authorised share capital of 600,000 ordinary shares of £0.50 each and of 50,000 8 per cent cumulative preference shares of £1 each.

Required:
(a) Prepare Keith Ltd’s trading and statement of profit or loss and statement of retained earnings for the year to 30 June 2020 and a statement of financial position as at that date.
(b) Explain why shareholders of Keith Ltd would not necessarily have been able to sell the business for its net assets value as at 30 June 2020.

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Advertising Cash Payables Debentures (10%) Receivables (all trade) Directors' remuneration Electricity Insurance Investments (quoted) Investment income Machinery: At cost Accumulated depreciation at 1.7.20 Office expenses Ordinary share capital (issued and fully paid) Preference shares Preference share dividend Retained earnings (at 1.7.20) Allowance for doubtful debts Purchases Rent and rates Dr £ 30000 7000 300000 55000 28000 17000 28000 420000 49000 4000 1240000 75000 Cr £ 69000 70000 4000 152000 200000 50000 132000 8000