Presented below is the trial balance of Thompson Ltd. at December 31, 2019.

A physical count of inventory on December 31 resulted in an inventory amount of £64,000; thus, cost of goods sold for 2019 is £645,000.
Instructions
Prepare an income statement and a retained earnings statement. Assume that the only changes in retained earnings during the current year were from net income and dividends. Thirty thousand ordinary shares were outstanding the entire year.

Transcribed Image Text:

Thompson Corporation Trial Balance December 31, 2019 Debit Credit Purchase Discounts 10,000 £ 189,700 Cash Accounts Receivable 105,000 Rent Revenue 18,000 160,000 Retained Earnings Salaries and Wages Payable 18,000 1,100,000 Sales Revenue Notes Receivable 110,000 Accounts Payable 49,000 Accumulated Depreciation-Equipment 28,000 Sales Discounts 14,500 17,500 Sales Returns and Allowances 70,000 Notes Payable Selling Expenses 232,000 Administrative Expenses 99,000 Share Capital-Ordinary 300,000 Income Tax Expense 53,900 Cash Dividends 45,000 Allovance for Doubtful Accounts 5,000 14,000 Supplies Freight-In 20,000 70,000 Land Equipment 140,000 100,000 Bonds Payable Gain on Sale of Land 30,000 Accumulated Depreciation-Buildings 19,600 Inventory 89,000 98,000 Buildings Purchases 610,000 Totals £1,907,600 £1,907,600