QUESTION ONE (40 marks) Kettering Plc, a trading company, was incorporated The following information is available for the financial year to 31 December 2016: on 1 January 2016 1. 3 million 1 ordinary shares were issued at par on January 1st 2. 1,140,000 4% preference shares of 1 each were issued 3. A long-term loan of 1,400,000 was taken by the company on March Dividends of 6p per share were paid on these shares during the year. 45,600 were paid on these shares during the year 31st at a 6% interest rate, with 3% to be paid at the end of each six month period, the first payment being made on September 30th. 4. The company received 20,000 interest on its cash balances during the year. 5. Sales for the year are equal to 10,000,000. 6. Administrative expenses paid during the year were 1,650,000. Administrative expenses owing at 31 December 2016 amounted to 265,000. 7. Wages paid during the year are equal to 750,000 of which wages paid in advance amounted to 30,000 8. Equipment was purchased for cash during the year (on 31 March 2016) at a cost of 3,600,000. It is expected to last 10 years and to have a salvage value at the end of its life of 1,000,000. Depreciation is charged pro rata to the proportion of the year the equipment was in use. 9, Corporation tax is charged at 20%. Assume that depreciation is tax deductible. No tax was paid during the year. 10. Trade payables at 31 December 2016, relating to purchases f inventory, are equal to 900,000. 11. Trade receivables at 31 December 2016 are equal to 2,250,000. owever, one of these debtors which owes 90,000 has gone bankrupt. 12. inventory purchases for the year are equal to 5,100,000. Inventory at 31 December 2016 valued at cost amounted to 900,000