Adiga Ltd is a company that has issued ordinary £1 shares and 7% £1 preference shares. The company’s trial balance as at 31 December 2012, after the income statement has been prepared, is shown in Table 6.13.

REQUIRED:

a) Prepare the statement of changes in equity for the year ended 31 December 2012.

b) Prepare the statement of financial position as at that date.

c) Deepak is an ordinary shareholder in Adiga Ltd and is a little disappointed at the level of dividends for the year. Comment on the level of dividends (both ordinary and preference) paid out during 2012.

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Table 6.13 Debit Credit Ordinary share capital 1,100,000 7% preference shares 400,000 6% debenture (2018) 300,000 Share premium 260,000 Non-current assets, at net book value 1,500,000 Trade receivables 329,000 Bank balance 190,000 Trade payables 205,000 Accruals 44,000 Prepayments 59,000 Inventories at 31 December 2012 430,000 Profit for the year 151,000 Preference dividends paid 28,000 Ordinary dividend paid 44,000 Retained profits at 1 January 2012 120,000 2,580,000 2,580,000