The trial balance extracted from the books of Tailor Times Ltd at 31 December 2012 was as follows:

You are given the following additional information: (i) The authorised and issued share capital is divided into 400,000 ordinary shares of 50p each. (ii) Inventory at 31 December 2012, £94,300. (iii) Wages and salaries due at 31 December 2012 amounted to £1,800. (iv) Business rates paid in advance at 31 December 2012 amounted to £700. (v) A dividend of £20,000 is proposed for 2012. (vi) The allowance for doubtful debts is to be increased to £1,500. (vii) A depreciation charge is to be made on freehold premises of £25,000 and machinery at the rate of 25 per cent per annum on cost. Required: An income statement for 2012 and a statement of financial position as at 31 December 2012.

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Share capital Retained profits 31 December 2011 Freehold premises at cost Provision for depreciation on freehold premises at 31 December 2011 Machinery at cost Provision for depreciation on machinery account as at 31 December 2011 Purchases Sales General expenses Wages and salaries Business rates Electricity Bad debts Allowance for doubtful debts at 31 December 2011 Accounts receivable Accounts payable Inventory at 31 December 2011 Bank balance 271,000 84,000 563,700 14,600 179,400 6,100 4,800 1,400 74,200 81,900 16,200 1,297,300 200,000 27,500 54,000 21,000 925,300 1,200 68,300 1,297,300