\begin{tabular}{|c|c|c|}

\hline & $\operatorname{Dr}$ & \\

\hline Preference share capital: 50p shares & & \\

\hline \begin{tabular}{l}

Preference share capital: 50 p shares \\

Ordinary share capital: $£ 1$ shares

\end{tabular} & & \begin{tabular}{l}

200,000 \\

300.000

\end{tabular} \\

\hline \begin{tabular}{l}

Ordinary share capital: $£ 1$ shares \\

General reserve

\end{tabular} & & 25,000 \\

\hline Exchange reserve & & 15,000 \\

\hline Retained profits as on 31 March 2011 & & $21,000 \quad$ \\

\hline Inventory 31 March 2011 & 184,000 & \\

\hline \begin{tabular}{l}

Revenue \\

Returns inwards

\end{tabular} & & $1,320,000$ \\

\hline Returns inwards & 34,000 & \\

\hline Purchases & 620,000 & \\

\hline Carriage inwards & 6,000 & \\

\hline Wages (putting goods into a saleable condition) & 104,000 & \\

\hline Wages: Warehouse staff & 40,000 & \\

\hline Wages and salaries: Sales staff & 67,000 & \\

\hline Wages and salaries: Administrative staff & 59,000 & \\

\hline Motor expenses (see Note (ii)) & 29,000 & \\

\hline General distribution expenses & 17,000 & \\

\hline General administrative expenses & 12,000 & \\

\hline Loan-note interest & 2,000 & \\

\hline Royalties receivable & & $5,000 \quad$ \\

\hline Directors' remuneration & 84,000 & \\

\hline Bad debts & 10,000 & \\

\hline Discounts allowed & 14,000 & \\

\hline Discounts received & & $11,000 \quad$ \\

\hline Plant and machinery at cost (see Note (iii)) & 240,000 & \\

\hline Provision for depreciation: Plant and machinery (see Note (iv)) & & $72,000 \quad$ \\

\hline Motor vehicles at cost (see Note (ii)) & 120,000 & \\

\hline Provision for depreciation: Motors (see Note (iv)) & & $48,000 \quad$ \\

\hline Goodwill & 200,000 & \\

\hline Development costs & 24,000 & \\

\hline Trade accounts receivable & 188,000 & \\

\hline Trade accounts payable & & $45,000 \quad$ \\

\hline Bank overdraft (repayable on demand) & &  \\

\hline Bills of exchange payable (all due within one year) & & $7,000 \quad$ \\

\hline Loan notes (redeemable in three years' time) & & $30,000 \quad$ \\

\hline Preference dividend & 12,000 & \\

\hline Ordinary dividend & $\frac{40,000}{2106000}$ & \\

\hline & $2,106,000$ & $2,106,000$ \\

\hline

\end{tabular}

Notes:

(i) Inventory of finished goods on 31 March $2012 £ 163,000$.

(ii) Motor expenses and depreciation on motors to be apportioned: distribution $4 / 5$, administrative $1 / 5$.

(iii) Plant and machinery depreciation to be apportioned: cost of sales $7 / 10$, distribution $1 / 5$, administrative $1 / 10$.

(iv) Depreciate the following non-current assets on cost: motor vehicles $20 \%$, plant and machinery $15 \%$.

(v) Accrue corporation tax on profits of the year $£ 38,000$. This is payable on 31 December 2012 .

\section*{You are to draw up:}

(a) a detailed income statement for the year ending 31 March 2012 for internal use, and

(b) an income statement for publication, also a statement of financial position as at 31 March 2012.