Frank Jon Ltd has just finished its second year of trading to 31 December 2017. Balances from Question 8.1 need to be brought forward into this question. Tax rates are the same as for 2016.

Data From Question 8.1

Frank Jon Ltd has just finished its first year of trading to 31 December 2016. Corporation tax throughout was 40% and income tax 20%. You are given the following information:
(i) Net trading profit, after adjustment for (ii) but before other adjustments, was £390,000.
(ii) Depreciation of £70,000 was charged. Capital allowances were £110,000.
(iii) An interim dividend of 4% on 0.8 million £1 ordinary shares was paid on 1 July 2016.
(iv) Loan-note interest of £14,000 (net) was paid on 31 December 2016.
(v) Income tax deducted from loan-note interest was paid on 31 January 2017.
(vi) A final dividend of 6% was proposed for the year.
(vii) Corporation tax for the year was estimated to be £145,000.

The following information is available:
(i) The proposed final dividend for 2016 (see Review Question 8.1) was paid on 31 January 2017.
(ii) Shares in Dagda Ltd were bought on 1 January 2017. A dividend of £4,200 was received on 30 September 2017.
(iii) Loan notes in Dagda Ltd were bought on 1 July 2017. Loan-note interest of £8,400 (net) was received on 31 December 2017.
(iv) Loan-note interest of £14,000 (net) was paid by Frank Jon Ltd on 31 December 2017.
(v) Income tax owing to the Revenue and Customs for 2017 was not paid until 2018. The 2016 income tax was paid on 30 January 2017.
(vi) An interim dividend of 5% on 0.8 million £1 ordinary shares was paid on 10 July 2017.
(vii) A final dividend of 9% was proposed for the year.
(viii) Depreciation of £90,000 was charged. Capital allowances were £120,000.
(ix) Net trading profit (before taking into account (ii), (iii), and (iv)) was £540,000.
(x) The corporation tax due for 2016 was paid on 1 October 2017. Corporation tax for the year to 31 December 2017 is expected to be £160,000. You are required to:
(a) Draw up the double entry accounts recording the above (except bank).
(b) Show the relevant extracts from the statement of profit or loss for the year and statement of financial position at the year end.