A Cosnett Ltd is a company principally involved in the manufacture of aluminium accessories for camping enthusiasts. Its trial balance at 30 September 2014 was:

\begin{tabular}{lrr}

Issued ordinary share capital ( $£ 1$ shares) & $£$ & $£$ \\

Retained profits at 1 October 2013 & 600,000 \\

Loan notes redeemable 2018 & 625,700 \\

Bank loan & $1,475,800$ & 150,000 \\

Plant and machinery at cost & & 25,000 \\

Accumulated depreciation to 30 September 2014 & 20,000 & 291,500 \\

Investments in UK companies at cost & & $3,058,000$ \\

Revenue & 86,100 & 2,800 \\

Dividends from investments & $2,083,500$ & \\

Loss arising on factory closure & 750 & \\

Cost of sales & 82,190 & \\

Political and charitable contributions & 42,100 & \\

Distribution costs & 63,000 & \\

Salaries of office staff & 82,180 & \\

Directors' emoluments & 6,700 & \\

Rent and rates of offices & 4,350 & \\

Hire of plant and machinery & 221,400 & \\

Travel and entertainment expenses & 396,100 & \\

General expenses & 421,440 & 245,820 \\

Trade accounts receivable & 17,950 & \\

Trade accounts payable and accruals & 21,000 & \\

Inventory & 19,360 & \\

Bank & & \\

\hline Interim dividend paid & $\underline{5043,920}$ & $\underline{5,043,920}$ \\

\hline \hline

\end{tabular}

You are provided with the following additional information:

(a) The company's shares are owned, equally, by three brothers: John, Peter and Henry Phillips; they are also the directors.

(b) The bank loan is repayable by five annual instalments of $£ 5,000$ commencing 31 December 2014.

(c) The investments were acquired with cash, surplus to existing operating requirements, which will be needed to pay for additional plant the directors plan to acquire early in 2015.

(d) On 1 January 2014 the company closed a factory which had previously contributed approximately $20 \%$ of the company's total production requirements.

(e) Trade accounts receivable include $£ 80,000$ due from a customer who went into liquidation on 1 September 2014; the directors estimate that a dividend of 20 p in the $£$ will eventually be received.

(f) Trade accounts payable and accruals include:
(i) $£ 50,000$ due to a supplier of plant, of which $£ 20,000$ is payable on 1 January 2015 and the remainder at the end of the year;
(ii) accruals totalling $£ 3,260$.
(g) The mainstream corporation tax liability for the year is estimated at $£ 120,000$.
(h) The directors propose to pay a final dividend of 10.5 per share and to transfer $£ 26,500$ to the deferred tax account.

\section*{Required: $\square$}

The income statement of Cosnett Ltd for the year to 30 September 2014 and statement of financial position at that date together with relevant notes attached thereto. The accounts should comply with the minimum requirements of the Companies Acts and accounting standards so far as the information permits.

\section*{(Institute of Chartered Secretaries and Administrators)}