Veronica is the owner of a manufacturing business. The following trial balance was extracted from her books as at 31 December 20X4:

The following information was also made available:
1. Expenses are to be allocated as follows:

2. Closing inventories included: raw materials £5,600; loose tools and utensils £3,200; finished goods £7,800; and work-in-progress £5,000.

3. Irrecoverable debts amounting to £1,000 are to be written off and the allowance for irrecoverable debts reduced to £1,200.
4. The following amounts have yet to be provided for in the trial balance: electricity and power £1,600 and new machinery £1,000.
5. The following amounts have been prepaid as at the year end: rates £600 and vehicle licences on sales representatives’ cars £80.
6. A vehicle costing £3,000 and written down to £1,000 was sold for £1,200. None of these entries have been recorded in the trial balance as the bookkeeper did not know how to adjust for the sale.
7. Annual depreciation on plant and machinery and on motor vehicles is to be provided using the reducing balance method. The rates used for each class of asset are 15 per cent (plant and machinery) and 20 per cent (motor vehicles).
8. An invoice for £200 for repairs to the building had been incorrectly posted to the administration expenses account.
9. A building costing £100,000 was purchased using a long-term loan on 1 January 20X4. Interest payable on the loan is 10 per cent per year. No entries for this transaction have been included in the trial balance. It has been decided to depreciate buildings at 5 per cent on cost.

Required
Prepare the following:
a. The manufacturing account and the statement of profit or loss for the year ended 31 December 20X4.
b. The statement of financial position as at 31 December 20X4.

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Cash in hand Bank Purchase ledger balances Sales ledger balances Allowance for irrecoverable debts Administration expenses Electricity and power Sales expenses Repairs to building Rates and insurance Factory wages Administration wages Sales department wages Sales revenue Raw material purchases Purchases of tools and utensils Opening inventories - Raw materials - Work-in-progress - Finished goods -Loose tools and utensils Motor vehicles (selling and distribution) Provision for depreciation on motor vehicles Plant and machinery Provision for depreciation on plant and machinery Land Capital account Dr £ 200 12,200 5,620 12,000 2,880 2,000 3,200 27,280 10,800 6,000 37,000 1,600 6,600 5,000 12,000 2,400 8,000 29,000 30,000 213,780 Cr £ 7,220 7,160 2,000 132,000 5,600 14,000 45,800 213,780