A Cosnett Ltd is a company principally involved in the manufacture of aluminium accessories for camping enthusiasts. Its trial balance at 30 September \(19 \times 5\) was:

You are provided with the following additional information:

(a) The company's shares are owned, equally, by three brothers: John, Peter and Henry Phillips; they are also the directors.

(b) The bank loan is repayable by five annual instalments of \(£ 5,000\) commericing 31 December \(19 \times 5\).

(c) The investments were acquired with cash, surplus to existing operating requirements, which will be needed to pay for additional plant the directors plan to acquire early in \(19 \mathrm{X} 6\).

(d) On 1 January 19X5 the company closed a factory which had previously contributed approximately 20 per cent of the company's total production requirements.

(e) Trade debtors include \(£ 80,000\) due from a customer who went into liquidation on 1 September \(19 \times 5\); the directors estimate that a dividend of \(20 \mathrm{p}\) in the \(£\) will eventually be received.

(f) Trade creditors and accruals include:
(i) \(£ 50,000\) due to a supplier of plant, of which \(£ 20,000\) is payable on 1 January \(19 \times 6\) and the remainder at the end of the year;
(ii) accruals totalling \(£ 3,260\).
(g) The mainstream corporation tax liability for the year is estimated at \(£ 120,000\).

(b) The directors propose to pay a final dividend of 10.5 p per share and to transfer \(£ 26,500\) to the deferred tax account.

Required The profit and loss account of Cosnett Ltd for the year to 30 September 19X5 and balance sheet at that date together with relevant notes attached thereto. The accounts should comply with the minimum requirements of the Companies Acts and accounting standards so far as the information permits.

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Issued ordinary share capital (1 shares) 600,000 Retained profit at 1 October 19X4 625,700 Debentures redeemable 19X9 150,000 Bank loan 25,000 Plant and machinery at cost 1,475,800 Accumulated depreciation to 30 September 19X5 291,500 Investments in UK companies at cost 20,000 Turnover 3,058,000 Dividends from investments 2,800 Loss arising on factory closure 86,100 Cost of sales Political and charitable contributions Distribution costs Salaries of office staff 2,083,500 750 82,190 42,100 Directors' emoluments 63,000 Rent and rates of offices 82,180 Hire of plant and machinery 6,700 Travel and entertainment expenses 4,350 General expenses 221,400 Trade debtors 396,100 Trade creditors and accruals 245,820 Stocks 421,440 Bank 17,950 Interim dividend paid 21,000 Interest charged 19,360 Provision for deferred taxation 45,100 5,043,920 5,043,920