Nelson Ltd was incorporated in 2000 with an authorized share capital of 500 000 £1 ordinary shares, and 200 000 5% cumulative preference shares of £1 each. The following trial balance was extracted as at 31 May 2005:

Additional information:
1 Stock at 31 May 2005 was valued at £195 000.
2 Administrative expenses owing at 31 May 2005 amounted to £13 000.
3 Depreciation is to be charged on the furniture and fittings at a rate of 12g% on cost.
4 Salaries paid in advance amounted to £4000.
5 Corporation tax owing at 1.6.05 is estimated to be £8000.
6 Provision is to be made for a final ordinary dividend of 1.25p per share.
Required:
Prepare Nelson Ltd’s trading and profit and loss account for the year to 31 May 2005 and a balance sheet as at that date.

Transcribed Image Text:

Administrative expenses Auditor's fees Cash at bank and in hand Creditors Debentures (12%) Dr 000 Cr 000 257 10 5 100 1885 Debenture interest paid 6 Debtors 225 Directors' remuneration Dividends paid: 60 Preference Ordinary interim Furniture, fittings and equipment: At cost 20 5 200 340000) Accumulated depreciation at 1.6.04 Investments at cost (market value at 31.5.05: Investment income Ordinary share capital (issued and fully paid) Preference share capital 48 335 22 400 200 Sales Profit and loss account (at 1.6.04) Purchases Share premium account 17 400 800 50 Stock at 1.6.04 Wages and salaries 155 44 1722 1722