Select Ltd is registered with an authorized capital of 300,000 ordinary shares of £1. The following trial balance was extracted from the books of the company on 31 March 2016, after the preparation of the trading account;

Required:
Prepare the profit and loss account section of the statement of profit or loss and a statement of changes in equity for of the company for the year ending 31 March 2016, and statement of financial position as at that date, after taking into account the following adjustments:
(1) The allowance for doubtful debtors is to be adjusted to £700.
(2) Depreciation is to be provided in respect of furniture and fittings at 10% per annum on cost.
(3) £25,000 is to be transferred from profit and loss to general reserve.
(4) Provide for a proposed dividend on share capital at 10%. Present the statement of financial position in a form which shows the shareholders' equity and the working capital.

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Dr Cr Ordinary share capital, fully paid Land and buildings at cost Sundry accounts receivable Furniture and fittings at cost VAT Sundry accounts payable 200,000 170,000 38,300 80,000 3,800 25,000 Inventory at 31 March 2016 42,000 Bank 12,000 Trading account: gross profit 98,050 Office salaries and expenses 25,000 Accumulated provision for depreciation on furniture and fittings 32,000 Share premium account 20,000 Advertising and selling expenses 5,000 Bad debts 250 Allowance for doubtful debts 600 Retained profits 12,000 Directors' fees 11,300 387,650 387,650