Harry Ltd was formed in 2003. The following balances as at 28 February 2017 have been extracted from the books of account: 

Additional information:

1 Corporation tax owing at 28 February 2017 is estimated to be £24,000.

2 Furniture and equipment are depreciated at an annual rate of 10 per cent of cost and they are all charged against administrative expenses.

3 A dividend of 20p per ordinary share is proposed.

4 All the authorised share capital has been issued and is fully paid.

Required:

Prepare Harry Ltd’s statement of profit or loss and statement of retained earnings for the year to 28 February 2017 and a statement of financial position as at that date.  

Transcribed Image Text:

Administration expenses Cash at bank and in hand Distribution costs Dividend paid (on preference shares) Furniture and equipment: At cost Accumulated depreciation at 1.3.17 Gross profit for the year Ordinary share capital (shares of £1 each) Preference shares (cumulative 15% of £1 shares) Retained earnings (at 1.3.17) Share premium reserve Inventory (at 28.2.17) Trade payables Trade receivables Dr £ 65000 10000 15000 6000 60000 130000 Cr £ 36000 150000 100000 40000 50000 20000 25000 135000 421000 421000