Pling Ltd has an authorised capital of 500,000 ordinary shares of £1 each and 250,000 10% preference shares of £1 each. The following trial balance has been extracted from the books of account at 30 September 20*8.

Additional information at 30 September 20*8

■ Inventories were valued at £16,320.
■ Wages accrued and unpaid amounted to £1,550.
■ Rates paid in advance amounted to £600.
■ Provision for doubtful debts is to be maintained at 5% of trade receivables outstanding at the year-end.
■ Depreciation is to be provided on non-current assets at the following rates:
– Buildings 2% on cost
– Office equipment 10% on cost
– Delivery vehicles 20% on cost.
■ The directors recommend
– A transfer to general reserve £10,000
– A final dividend on ordinary shares of £25,000 be provided
– A final preference dividend be provided
– Provision for corporation tax £28,420 be made.

Required

a) Prepare an income statement for the year ended 30 September 20*8.
b) Prepare a balance sheet at 30 September 20*8.

Transcribed Image Text:

Issued capital 100,000 ordinary shares of £1 each 30,000 10% preference shares of £.1 each Buildings at cost Office equipment at cost Delivery vehicles at cost Provision for depreciation - buildings Trade receivables Trade payables Inventories 1 October 20*7 Purchases Sales Motor expenses Rent and rates Wages - office equipment - delivery vehicles General expenses Retained earnings General reserve Bank Provision for doubtful debts Interim dividends paid - ordinary shares - preference shares Dr £ 350,000 30,000 60,000 16,840 14,710 183 940 12,470 10,100 57,200 18,520 42,720 20,000 1,500 818,000 Cr £ 100,000 30,000 180,000 15,000 36,000 6,970 412,480 27,000 10,000 550 818,000