Bayliss Limited is a retailer of ladies' fashion material. The following trial balance has been extracted from the books of account at 31 December 2015: REQUIRED (a) Prepare the profit or loss statement for Bayliss Limited for the year ended 31 December 2015. (b) Preparethestatementofchange sinequityforBayliss Limitedfort heyearended31December201 5 Dr Cr S 5% debentures (2017) Administrative expenses Cash and cash equivalents 80000 205000 32000 Distribution costs 197000 Dividends paid General reserve Interest paid Inventory at 1 January 2015 Non-current assets at cost/valuation 10000 21000 13000 98000 Land and buildings Plant and machinery Provision for depreciation Buildings Plant and machinery Ordinary shares of $0.50 each fully paid Other payables receivables Purchases Retained earnings Revenue Share premium Trade payables Trade receivables 185000 204000 23000 94000 140000 7000 (c) Prepare the statement of financial position for Bayliss Limited at 31 December 2015 3000 480000 61000 984 000 3000 59000 109000 1504000 1504000 The statement of financial Additional information position of a limited company may include capital reserves and also revenue reserves REQUIRED 1 Inventory at 31 December 2015 is valued at a cost of $105000. Land is included in the trial balance at a value of $135000. It is to be revalued to $150000 at 31 December 2015 3 Depreciation for the year ended 31 December 2015 is to be provided as follows: (d) Explain the difference between a capital reserve and Buildings 2% per annum using the straight-line method Plant and machinery- 10 % per annum using the reducing balance method. All annual depreciation is to be charged to administrative expenses a revenue reserve. Trade receivables includes a debt of $9000 which is to be written off to administrative expenses at 31 December 2015. 4 The directors wish to make provision for doubtful debts of 3 % of trade receivables. The adjustment should be charged to administrative expenses 6 On 31 December 2015, Bayliss Limited made a bonus issue of shares on the basis of one ordinary share for every twenty ordinary shares held. The company policy is to leave reserves in their most flexible form. No entries have been made in the books of account in respect of the bonus issue. 7 Debenture interest has been paid to 30 September 2015