Sunset Ltd has an operating profit for the year ended 31 December 20X2, before dealing with the

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Sunset Ltd has an operating profit for the year ended 31 December 20X2, before dealing with the following items, of £150,000. Complete the profit and loss account.

(a) The standard rate of income tax is 25 per cent.

(b) Sunset Ltd had issued £50,000 of 6 per cent debentures. It paid the interest for the year, less income tax, on 31 December 20X2.

(c) Sunset Ltd owns £20,000 of 5 per cent debentures in another company. It received a year’s interest, less income tax, on 27 December 20X2.

(d) No cheque has been paid to the Inland Revenue for income tax.

(e) Sunset Ltd has 30,000 ordinary shares of £1 each in Moonshine Ltd. Moonshine Ltd paid a dividend to Sunset Ltd of 12 per cent on 24 November 20X2. Moonshine Ltd is a ‘related company’ of Sunset Ltd.

(f) Sunset Ltd had a liability for corporation tax, based on profits for 20X2, of £54,000.

(g) Sunset proposed a dividend of 10 per cent on its 200,000 ordinary shares of £1 each, out of the profits for 20X2.

(h) Transfer £10,000 to general reserve.

(i) Unappropriated profits brought forward from last year amounted to £22,480.

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