1.The Little Brewery Ltd produces and sells craft beers from rented premises in the North East of Scotland.The business has a financial year end of 31 March and the Directors provide you with the following information for the year ending 31 March 2019:

List of balances as at 31 March 2019

Bank account

9,400

Delivery Costs (goods to customers)

25,800

Directors' Salaries

62,200

Inventory as at 1 April 2018

60,800

Motor Expenses - note (vi)

12,400

Motor Vehicles at cost

106,000

Motor Vehicles - accumulated depreciation at 1 April 2018

42,400

Plant and Equipment at cost

242,000

Plant and Equipment - accumulated depreciation at 1 April 2018

115,675

Property Expenses - notes (iii) and (vi)

45,490

Purchases

508,600

Retained Earnings at 1 April 2018

99,315

Sales

877,100

Salaries and Wages - note (vi)

100,200

Share Capital - ordinary 1 shares

50,000

Share Premium

10,000

Trade Payables

48,000

Trade Receivables

69,600

Additional information:

(i)The inventories at 31 March 2019 have been counted and valued at a cost of 70,750.

(ii)The accountancy fee due and still to be accounted for at 31 March 2019 is 4,800.

(iii)Property costs paid in advance at 31 March 2019 amount to 7,100.

(iv)All non-current assets are assumed to have a nil residual value and are to be depreciated on the following basis:

Motor Vehicles - 20% straight line

Plant and Equipment - 15% reducing balance

(v)The tax due and still to be accounted for at 31 March 2019 amounts to 17,000.

(vi)The following expenses are to be allocated on the basis of:

Cost of Sales

Administration Expenses

Distribution Costs

Motor Expenses

n/a

50%

50%

Motor Vehicles - depreciation charge

n/a

50%

50%

Plant & Equipment - depreciation charge

70%

20%

10%

Property Costs

50%

30%

20%

Salaries and Wages

50%

30%

20%

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Required:

(a)Based on all the information given, prepare The Little Brewery Ltd's Statement of Profit or Loss for the year ending 31 March 2019 and the Equity section of the Statement of Financial Position as at that date.

(Note:Show all workings as marks will be awarded.Round any calculations to the nearest .)

(20)

(b)Explain to the Directors of The Little Brewery Ltd the four different profit figures in the Statement of Profit or Loss and what they reveal about the business.Use two relevant financial ratios to support your explanation.