Camden Lock Ltd has just finished its second year of trading to 31 December 2007. Balances need to be brought forward into this question. Tax rates are the same as for 2006. ;

The following information is available:

(i) |The proposed final dividend for 2006 (see Review Question 8.1) was paid on 31 January 2007.

(ii) | Shares in Strand Ltd were bought on 1 January 2007. A dividend of £4,200 was received on 30 September 2007.

(iii) Loan notes in Strand Ltd were bought on 1 July 2007. Loan note interest of £8,400 (net) was received on 31 December 2007.

(iv) Loan note interest of £14,000 (net) was paid by Camden Lock Ltd on 31 December 2007.

(v) Income tax owing to the Revenue and Customs for 2007 was not paid until 2008. The 2006 income tax was paid on 30 January 2007.

(vi) An interim dividend of 5% on 800,000 £1 ordinary shares was paid on 10 July 2007.

(vii) A final dividend of 9% was proposed for the year.

(viii) Depreciation of £90,000 was charged. Capital allowances were £120,000.

(ix) Net trading profit (before taking into account (i/), (iii), and (iv)) was £540,000.

(x) | The corporation tax due for 2006 was paid on 1 October 2007. Corporation tax for the year to 31 December 2007 is expected to be £160,000.

You are required to:

(a) Draw up the double entry accounts recording the above (except bank).

(b) Show the relevant extracts from the income statement for the year and balance sheet at the year end.