The following trial balance has been extracted from the books of Arran plc as at 31 March 20X7:

Additional information:

1. Stocks at 31 March 20X7 were valued at £150,000.

2. Depreciation for the year to 31 March 20X7 is to be charged against administrative expenses as follows:

3. Assume that the basic rate of income tax is 30 per cent.

4. Corporation tax of £180,000 is to be charged against profits on ordinary activities for the year to 31 March 20X7.

5. £4,000 is to be transferred to the deferred taxation account.

6. The company proposes to pay a final ordinary dividend of 30p per share.

Required:

In so far as the information permits, prepare the company’s profit and loss account for the year to 31 March 20X7 and a balance sheet as at that date in accordance with the Companies Acts and related accounting standards. Profit and loss account and balance sheet notes are not required, but you should show the basis and computation of earnings per share at the foot of the profit and loss account, and your workings should be submitted.

Transcribed Image Text:

Administrative expenses Called-up share capital (all ordinary shares of £1 each) Cash at bank and in hand Debtors Deferred taxation (at 1 April 20X6) Distribution costs Fixed asset investments Income from fixed asset investments Interim dividend paid Overprovision of last year's corporation tax Land and buildings at cost Land and buildings: accumulated depreciation at 1 April 20X6 Plant and machinery at cost Plant and machinery: accumulated depreciation at 1 April 20X6 Profit and loss account (at 1 April 20X6) Profit on exceptional item Purchases Sales Stocks at 1 April 20X6 Trade creditors £000 95 25 230 500 280 21 200 400 1,210 140 £3,101 £000 200 60 12 5 30 170 229 50 2,215 130 £3,101