The trial balance of Black Ltd as at 31 December 20X5 was as follows:

The following information is available none of which has been taken account of in the preparation of the trial balance above:

(a) Stock as at 31 December 20X5 is valued at £22,000.

(b) Vehicles are primarily used for distribution, buildings equally between produc¬ tion, distribution and administration and equipment equally between production and administration.

(c) Buildings are to be depreciated 1% straight line, equipment 20% straight line and vehicles 25% reducing balance.

(d) Equipment was sold on the 31 December 20X5 for £15,000. This had been credited to sales. The original cost was £20,000 and it had been purchased on 31 December 20X2. No further entries than cash and sales had been made in the books.

(e) Bad debts of £2,600 need writing off and a provision for bad debts at the rate of 5% is to be introduced.

(f) Taxation for the year is estimated at £9,860.
(g) A final dividend of 4p per share is proposed by the directors.

(h) Accruals of £3,500 for administration expense are required and prepayments of £5,600 have been identified \A/ithin distribution expenses.
(i) The interest on the debentures has not yet been paid.
Prepare the profit and loss account for the year ended 31 December 20X5 and the balance sheet as at that date in a form suitable for publication.

Transcribed Image Text:

Dr Cr Debtors and creditors. 46,800 34,200 Returns inwards 2,450 Productive wages 74,000 Distribution expenses 32,870 Administrative salaries 61,230 Purchases and sales 321,700 552,600 Office expenses 5,630 Returns outwards 4,670 Stock 1.1.X5 22,300 Ordinary 1 shares 150,000 Debentures 6% 50,000 Retained profits 1.1.X5 9,870 Premises 150,000 Vehicles 85,000 Equipment 70,000 Depreciation as at 1.1.X5 Premises 11,600 Equipment 27,500 Vehicles Bank 29,250 2,290 871,980 871,980