The following information is given for Helaminge Ltd at 30 September 20*8:

Authorised and issued share capital 800,000 ordinary shares of 25 pence each; premises at cost £80,000; machinery at cost £60,000; vehicle at cost £30,000; inventories £20,000; trade receivables £12,000; bank £6,000; trade payables £8,000.

Required 

Prepare a balance sheet at 30 September 20*8.

The profit generated by the business of a sole trader belongs to the trader. It is credited to his capital account.

The profits that are removed from the business as drawings are deducted from the capital.

The remainder of the profit is ‘ploughed back’ and may be used to purchase assets.

The same is true of a limited company. Some profits will leave the business as dividends. The remainder is ‘ploughed back’ and may be used to purchase assets.

Consider this example:

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EXAMPLE Daphne Baird is a sole trader. Her capital account has a balance of £50,000. D Baird Ltd is a private limited company. The authorised share capital consists of 50,000 £1 ordinary shares.