10.2 You are presented with the following trial balance of Lincoln plc as at 31 December 1992.

£000 £000 Share capital, 50p ordinary shares 1,000 Share premium 500 15% debentures 800 Profit and loss balance 1 January 200 Purchases and sales 2,400 5,000 Purchase returns and sales returns 100 150 Sales and purchase ledger control balances 1,000 400 Property: cost 800 depreciation to 1.1.92 200 Land: at valuation on 1.1.83 900 Machinery: cost 1,600 depreciation to 1.1.92 500 Discounts for prompt payment 20 10 Operating expenses 1,300 Interim dividends paid 100 Debenture interest paid to 1.7.92 60 Bank 30 Suspense account 210 Stock at 1.1.92 300 8,790 8,790 The book-keeper has not recorded certain items, and seems to have only partially recorded others. Details are given below.

(a) Half of the debentures had been redeemed on 1 July 1992 at a cost of £380,000.
Only one entry, in the bank account, had been made.

(b) During the year 1992 200,000 more ordinary shares, identical to those already in issue, had been issued at 110 pence per share. Again only one entry, in the bank account, had been made.

(c) The managing director has taken £10,000 of the purchases for his own use and no entries have been made for this.

(d) The land is to be revalued, as at 31 December 1992, at £1,500,000.

(e) Depreciation of 2% p.a. on cost needs to be provided on the property.

(f) One-tenth of the cost of machinery figure represents items which were fully depreciated down to their estimated scrap value of £10,000 prior to 1 January 1992. There have been no purchases or disposals of machinery during 1992. Depreciation of 10% p.a.
on the reducing balance basis needs to be provided on the machinery, as appropriate.
(g) An amount of £50,000 had been paid during the year 1992 to a customer because of personal injury he had suffered as a result of a fault in the goods delivered to him.
Only one entry, in the cash book, had been made.
(h) A final dividend of 5 pence per share, on all the shares in issue on 31 December 1992, is to be proposed.
(i) Closing stock at 31 December 1992 is £400,000. Half of this figure represents purchases still included in the purchase ledger control account balance at 31 Dccember 1992.
(j) Any balance on the suspense account should be shown in the profit and loss account as a separate item.
Prepare the profit and loss account and balance sheet of Lincoln plc, in good order, as at 31 December 1992. Your layout and use of headings and subtotals should be designed to give the maximum of helpful information to the reader. All necessary workings should be clearly shown.