Basalt plc is a wholesaler. The following is its trial balance as at 31 December 20X0.

The following additional information is supplied:
(i) Depreciate plant and machiner y 20% on straight-line basis.
(ii) Inventor y at 31 December 20X0 is £90,000.
(iii) Accrue auditors’ remuneration £2,000.
(iv) Income tax for the year will be £58,000 payable October 20X1.
(v) It is estimated that 7/11 of the plant and machiner y is used in connection with distribution, with the remainder for administration. The motor vehicle costs should be assigned to distribution.
Required:

(a) Prepare an income statement and balance sheet in a form that complies with IAS 1. No notes to the accounts are required.

(b) Briefly explain what you would expect to find in the following sections of a UK company annual report:
(i) Directors’ report. (ii) Chairman’s report. (iii) Auditors’ report.

Transcribed Image Text:

Ordinary share capital: 1 shares Share premium Dr Cr 000 000 300 20 16 General reserve Retained earnings as at 1 January 20X0 55 Inventory as at | January 20X0 66 Sales 962 Purchases 500 Administrative expenses 10 Distribution expenses 6 220 Plant and machinery - cost Plant and machinery- provision for depreciation Returns outwards Returns inwards Carriage inwards Warehouse wages Salesmen's salaries Administrative wages and salaries Hire of motor vehicles Directors' remuneration Rent receivable Trade receivables Cash at bank Trade payables 49 25 27 9 101 64 60 19 30 326 62 66 1,500 1,500