A new company has just completed its first year of trading. It was financed from £900,000 of share capital and £500,000 of long-term loans. A site was purchased of an exiting chemical plant for £700,000 (broken down into a value for the land of £250,000 and £450,000 for the plant and machinery), and modifications were carried out at a total cost of £300,000. Distribution is important and vehicles are purchased at Profit and Loss Account 100,000. Office equipment was purchased for £50,000. Straight line depreciation applies to assets at 15% per year for plant and machinery and 30% per year for vehicles.
During the first year sales totaled £4,200,000, stock of products totaled £150,000. Raw materials purchased were £2,000,000 and raw material stock at year end was £200,000. On average through the year 5 weeks credit was given and three weeks taken. Total production, administration and sales costs totaled £1,500,000. Interest on long term loans was 7%. Provision for tax should be 25% and a dividend of 20% of profit after tax will be declared.
Prepare the year end: Profit and Loss Account, Cash Account, and Balance Sheet.