Assume that you were recently hired at Lilo Plc as a junior accountant and were asked to help prepare the financial reports for the year ended 31 December 2019. In addition, the head of the accounting department wanted to assess your knowledge about the financial statements, hence, requested you to prepare a report. The companys trial balance is shown below, together with the guide on the format and content of the report:

Debit ()

Credit ()

Sales

72,813

Purchases

35,108

Inventories as at 1 January 2019

12,572

Dividend paid

1,600

Interest

700

Distribution costs

12,533

Administrative expenses

9,311

Trade receivables

9,122

Cash at bank

473

7% debentures

20,000

Ordinary share capital

10,000

Share premium

8,000

Retained earnings - 1 January 2019

17,349

Trade payables

2,927

Accruals

412

Property, plant and equipment at cost

71,338

Property, plant and equipment - accumulated depreciation

21,256

152,757

152,757

Further information:

The ordinary share capital of the company consists of ordinary shares with a nominal value of 25p. All of this has been issued.

The inventories at the end of the year have cost of 14,186 while the net realizable value is 16,145.

The corporation tax charge for the year has been calculated as 3,537.

Interest on debentures for the last 6 months of the year has not been included in the accounts in the trial balance.

Land included in property, land and equipment at a carrying value of 24,000 is to be revalued at the end of the year at 29,000.