=+Question 1 (Based on ICAI, P3 Summer 2006, Question 1 er 2)

You are the Finance Director of THOMPSON Group plc (THOMPSON), a group of companies that imports, blends and packs high quality tea for sale to the retail trade.

THOMPSON prepares its financial statements to 31 December each year, and you have just extracted the following trial balance as at 31 December 2005 from the group’s books and records:

588 INTERNATIONAL FINANCIAL ACCOUNTING AND REPORTING Trial Balance as at 31 December 2005

€1 ordinary shares Retained earnings at 31 December 2004 Cost of investment in ROSS Limited Cost of investment in DAVID Limited Property — cost at 31 December 2004 Property — accumulated depreciation at 31 December 2004 Plant and equipment — cost at 31 December 2004 Plant and equipment — accumulated depreciation at 31 December 2004 Development costs Inventory at 31 December 2004 Trade receivables Prepayments Bank overdraft Trade payables Accruals 10% debentures Revenue Purchases Selling and distribution costs Administrative expenses Debenture interest paid Dividends paid Additional Information Note DR

€’000 250 150 600 1,800 100 260 35 15 292 25 40 12 600*

9,500 LiL