From the following balances in the books of Breaker plc you are to draw up 

(i) A detailed trading and profit and loss account for the year ended 31 March 20X4 for internal use, and 

(ii) A profit and loss account for publication:

Notes:

(a) Stock at 31 March 20X4 £230,000.

(b) Accrue auditor’s remuneration £8,000.

(c) Of the plant and machinery, £70,000 is distributive in nature, while £35,000 is for administration.

(d) Depreciate plant and machinery 25 per cent on cost.

(e) Of the motor expenses, ⁴/₅ is for sales and distribution and 1/5 for administration.

(f) Corporation tax on ordinary profits is estimated at £143,000.

(g) A sum of £25,000 is to be transferred to general reserve.

Transcribed Image Text:

Plant and machinery, at cost (see Note (c)) Bank interest receivable Discounts allowed Discounts received Hire of motor vehicles: Sales and distribution Hire of motor vehicles: Administrative Licence fees receivable General distribution expenses General administrative expenses Wages and salaries: Sales and distribution Administrative Directors' remuneration. Motor expenses (see Note (e)) Ordinary dividend paid Stock 31 March 20X3 Sales Purchases Returns outwards Returns inwards Profit and loss account as at 31 March 20X3 £ 105,000 3,000 7,000 6,000 14,000 5,000 13,000 26,000 19,000 177,000 98,000 41,000 11,000 80,000 208,000 1,450,000 700,000 22,000 29,000 88,000