Nelson Ltd was incorporated in 2003 with an authorized share capital of 500,000 1 ordinary shares, and 200,000 5 per cent cumulative preference shares of

Nelson Ltd was incorporated in 2003 with an authorized share capital of 500,000 £1 ordinary shares, and 200,000 5 per cent cumulative preference shares of £1 each. The following trial balance was extracted as at 31 May 2011:

Additional information:
1 Stock at 31 May 2011 was valued at £195,000.
2 Administrative expenses owing at 31 May 2011 amounted to £13,000.
3 Depreciation is to be charged on the furniture and fittings at a rate of 121–2 per cent on cost.
4 Salaries paid in advance amounted to £4000.
5 Corporation tax owing at 31 May 2011 is estimated to be £8000.
6 Provision is to be made for a final ordinary dividend of 1.25p per share.

Required:
Prepare Nelson Ltd's trading and profit and loss account for the year to 31 May 2011 and a balance sheet as at thatdate.

Dr Cr Administrative expenses Auditor's fees Cash at bank and in hand Creditors Debentures ( 1296) Debenture interest paid Debtors Directors' remuneration Dividends paid: 257 10 85 100 6 225 60 Ordinary interim Preference Furniture, fittings and equipment: At cost 200 Accumulated depreciation at 1.6.10 Investments at cost (market value at 31.5.11: 48 340000) Investment income Ordinary share capital (issued and fully paid) Preference share capital Profit and loss account ( 6.10) Purchases Sales Share premium account Stock at 1.6.10 Wages and salaries 335 400 200 17 800 155 1722 1722