The Marston Co. Ltd has an authorised capital of £400,000 dividend into 300,000 £1 ordinary shares and 100,000 6% £1 preference shares.

Of these, 60,000 preference shares and 250,000 ordinary shares have been issued and fully paid.

At the end of the year (31 December) the following information was available:

(a) The net profit for the year was £80,000. The directors recommended a transfer of £15,000 to a general reserve, and proposed the payment of the preference dividend and an ordinary share dividend of 15%.

(b) At the start of the year there were retained profits held in a profit and loss account of £36,000.

(c) The other closing balances in the books were:

Fixed assets £350,000 Current assets £126,000 Current liabilities £50,000 Prepare the company's profit and loss appropriation account for the year ended 31 December and a balance sheet as at that date. Your answer should be fairly similar in format to Lumley's Larnpshades Ltd in Figure 13.1. LO.1