It is now several years since the Bales and Mike Cowley set up their company and all is going well. Mike's extra contacts and investment of cash combined with the long hours put in by Jolm and Azina, have led to the business expanding rapidly. The 1 ordinary shares of the company are held as follows: John Bale Azina Bale Mike Cowley 100.000 100 000 50 000 In addition Mike holds 200 000 l emulative preference shares redeemable in 2010. These shares are entitled to a vote if the preference dividend is unpaid in any year until the dividend is made good. This was to guarantee Mike some income provided the company made profits. All three of the shareholders are directors and receive fees for this. In the current year these were paid as follows: Mike Azina John - Chairman 6.000 6.000 10 000 In addition John and Azina receive salaries for their work for the business. John receives 50 000 as chief executive and Azina receives 245 000 as finance director. The initial trial balance for the year ended 28 February 1998 has been extracted and Azina is now working on the end of year adjustments. The Case study at the end of this chapter includes the initial trial balance the reconciliation of the sales and purchase ledger balances with their respective control accounts the end of year adjustments some points of concern which have to come to light during the year end prepara- tions and which will need to be put right.