Self-test Terry Ltd prepared their profit and loss account and balance sheet for the year but were not able to use the correct formats. You are presented with the accounts as prepared and required to redraft them and present them in the correct format.

Profit and loss account as at 30 June 2008 Sales 316,800 Less cost of sales 214,200 102,600 Add interest received 1,011 Discount received 3,879 Gross profit 107,490 Less depreciation 4,512 Interest on loans 3,008 Bank charges 1,014 Office expenses 2,873 Bad debts 1,984 Taxation 2,430 15,821 Net profit 91,669 Less dividends 5,700 Debenture dividend 6,000 11,700 Retained profit 79,969 Balance sheet for the year ending 30 June 2008 Fixed assets Machinery 123,420 Office equipment 11,800 Goodwill 40,000 Stock 5,900 181,120 Current assets Cash at bank 1,003 Prepayments 2,970 Debtors 5,890 9,863 190,983 Current liabilities Taxation 4,142 Debentures 6,000 Accruals 1,772 Creditors 5,662 Loan due 2012 12,900 30,476 160,507 Financed by Ordinary shares 30,000 Share premium 5,830 Preference shares 19,000 Profit for the year 79,969 Retained earnings 20,008 Dividends due 5,700 160,507