The trial balance of Burn Ltd. as at 31.12.X9 was as follows:

The following additional information is available none of which has been accounted for in the trial balance:
• Inventory 31.12.X9 £4,560.
• Premises and equipment are used 50% production, 25% distribution and 25%
administration and are depreciated at the rate of 2% and 10% respectively.
• Vehicles are only used by distribution and are depreciated at 25% reducing balance.
• A provision for bad debts of 5% is to be made.
• The new capital consists of the issue on 1.12.X9 of 40,000 £1 shares; the ledger clerk did not know how to treat this item in the ledgers.
• Tax for the year is estimated at £1,200.
• A vehicle, purchased 1.1.X7 for £7,000 was sold on 1.8.X9 for £3,750. The proceeds had been credited to sales.
• 5% Debentures were issued on 1.1.X9, par value £10,000, for £9,500. The £9,500 has been credited to accumulated profits 1.1.X9 account.
Prepare the income statement and the balance sheet for Burn Ltd. as at 31.12.X9 in a form suitable for publication.

Transcribed Image Text:

Dr Cr Purchases and sales 15,260 83,460 Inventory 1.1.X9 6,230 Debtors and creditors 8,240 7,210 Production salaries and wages 12,320 Production expenses 7,210 Warehouse expenses 950 Warehouse wages 10,100 Administration salaries 14,200 Administration expenses 950 Ordinary 1 shares 100,000 Share premium account 20,000 Accumulated profits 1.1.X9 62,000 Premises 200,000 Equipment 50,000 Vehicles 15,000 Provision for depreciation: Premises 20,000 Equipment 15,000 Vehicles 6,560 6% Debentures Bank Cash New capital 50,000 103,520 250 80,000 444,230 444,230