11.6 The following is the trial balance of Baxter Ltd as at 31 December 20X3:

£

£

Called-up share capital 4,000,000 Profit and loss account 329,600 8% Debenture loan 800,000 Plant and machinery at cost 5,840,000 Lixtures and fittings at cost Accumulated depreciation 704,000

- plant and machinery at 1.1.X3 1,168,000

- fixtures and fittings at 1.1.X3 236,400 Debtors 432,000 Bad debts written off during the year 31,000 Bank 112,000 Trade creditors 537,000 Sales 6,400,000 Stock 1,232,000 Cost of goods sold 3,616,000 Wages and salaries 608,000 Distribution expenses 265,600 General expenses 598,400 Debenture interest paid 32,000

£13,471,000

£13,471,000 The following information is available:

1. Depreciation is to be provided on fixtures and fittings at the rate of 10 per cent on cost; on plant and machinery it is to be provided at the rate of 20 per cent on the reducing balance.

2. The directors have decided to make a provision of 10 per cent of debtors in respect of doubtful debts.

3. Audit fees are estimated to be £20,000.

4. Corporation tax on the profit for the year is calculated to be £48,000.

5. The directors have decided to recommend a dividend of 5 per cent on the called-up share capital.

6. Provision is to be made for outstanding debenture interest.

Prepare Baxter Ltd’s profit and loss account for the year ended 31 December 20X3 and balance sheet as at that date.

11.7 The trial balance of Clarion Ltd at 31 March 20X6 was as follows:
£
£
Issued share capital 400,000 Share premium account 40,000 Profit and loss account at 1.4.X5 82,000 Land and buildings at cost 600,000 Office equipment at cost 410,000 - accumulated depreciation at 1.4.X5 89,000 Motor vehicles at cost 200,000 - accumulated depreciation at 1.4.X5 37,500 Stock 250,000 Sales 2,600,000 Cost of goods sold 1,100,000 Wages and salaries 166,000 Administrative expenses 261,200 Selling expenses 190,000 Debtors 266,000 Provision for doubtful debts 25,000 Creditors 130,000 Bank 50,300 Long-term loan 100,000 Loan interest 10,000 £3,503,500 £3,503,500 The following information is relevant:
1. Provision is to be made for audit fees of £16,000.
2. Depreciation is to be provided for the year at the rate of 15 per cent per annum on the cost of office equipment and at 25 per cent per annum on the cost of the motor vehicles.
3. The provision for doubtful debts is to be adjusted to 10 per cent of the debtors out¬ standing at 31 March 20X6.
4. The directors have had the land and buildings valued at £800,000 and they have decided to revalue them in the accounts.
5. Corporation tax of £100,000 is to be provided.
6. The directors propose to declare a dividend of 12 per cent.
Prepare the profit and loss account for the year ended 31 March 20X6 and the balance sheet as at that date.