Benham Ltd has in issue six million shares of 50p each, issued at 60p each. Apart from the balances in the Share capital and Share premium accounts, the remaining account balances extracted as at 31 March 2011 have been listed. You are further informed:

(a) Cost of inventory as at 31.3.2011 was £398,000.

(b) Premises have been rented for £5,000 per month and a third of it used for production activity.

(c) A vehicle was acquired for £60,000 on 1 January 2011.

(d) Machinery is depreciated at 5% per annum using the straight-line method; and vehicles at 20% per annum on the reducing balance method.

(e) A debt of £12,000 is to be written off and the allowance for doubtful debts adjusted to cover 5% of remaining receivables.

(f) Reported in the list as taxation is the under-provision for tax relating to previous year. Current year’s tax is estimated at £29,000. Ignore deferred tax.

(g) A dividend of 2p per share declared at the year-end has not been accounted for.

Required:

Prepare for internal use the Statement of income for the year ended 31 March 2011 along with the Statement of changes in equity as well as the Statement of financial position as at 31 March 2011.

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Machinery at cost Motor vehicles at cost Accumulated depreciation - 31 March 2010 Machinery Motor vehicles Purchases Trade receivables Allowance for doubtful debts Rent Staff salary Trade payables Advertising Interest paid Cash and bank balance Bank overdraft Inventory - 31 March 2010 Taxation account (debit) Sales Retained earnings b/f (credit) Returns inwards Administrative expenses Carriage inwards Investments Dividend income £'000 2,800 920 420 380 2,385 972 32 48 346 398 74 4 11 41 212 9 3,282 176 44 194 21 340 51