Enterprise Print Limited is a small printing company. It had been highly profitable for a number of years and its growth had been quite remarkable. The Chairman and Managing Director, Tom Laird, had always been meticulous in supervising all company activities, but over recent years he has been finding it increasingly difficult to maintain day-to-day control. Tom has been careful to minimise the companys administrative costs. The annual financial accounts had always confirmed his intuitions about the companys progress, so there seemed to be no need for more frequent reporting.

However, because of the recent pandemic, Enterprise Print Ltd has been finding it very difficult to win new contracts. It is company policy to depreciate all company vehicles at 20% per annum on a reduced-balance basis. The companys premises are listed buildings, and accordingly, there are restrictions on refurbishment. Tom had noticed deterioration, and he was relieved that these buildings are depreciated annually at 1% on a straight-line basis. It is company policy to pay a total dividend of 10,000, and Tom is proposing to retain this policy, but is not convinced it will be possible.

Tom has explored various ways to improve the sales of the company, and the Marketing Manager, Siobhan McCall, has also outlined a number of ideas. Siobhan is proposing to start an online service for the local community; according to her business plan, the sales revenue would increase by 20%. However, Siobhan estimates that there will be an initial cost of 50,000, and operating costs will increase by 5%. Her second proposal is to allow discounts to students, which she forecasts will yield a 2% increase in revenue, after any additional costs. However, Tom is not convinced that providing service directly to students will increase the revenue. Tom is looking to approach local companies in an effort to promote his business.

Tom decides to review the financial position of the company before making any decisions about future plans, and the company accountant prepare the Trial Balance for 31 December 2021 (see over).

Trial Balance for Enterprise Print for the year ended 31 December 2021

Sales	350,000
Sales returns	20,000
Premises : cost	200,000
: opening cumulative depreciation	5,000
Vehicle : cost	120,000
: opening cumulative depreciation	12,000
Purchases	110,000
Purchase returns	10,000
Light and heat	15,000
Rent	15,000
Bank	100,000
Insurance	6,000
Trade debtors /Receivables	15,000
Bad debts written off during the year	4,000
Bad debt provision (1 January 2021)	250
Trade Creditors/payables	20,000
Loan interest paid	5,000
Long term loan	110,000

Notes

1. The vehicles are depreciated at 20% per annum on a reduced-balance basis.

2. Premises are depreciated at 1% per annum on a straight-line basis.

3. The trade debtors figure of 15,000 includes the bad debts of 4,000 and is before any provision. Analysis of the debts shows that additional bad debt of 500 should be written off.

4. After dealing with (3) the bad debt provision is to be maintained at 5% of debts.

5. Enterprise Print propose to pay a dividend of 10,000.

6. The tax for the year is 13,250, of which 6,600 was outstanding at 31 December 2021

7. The rent is paid yearly in advance on 1 February.

8. On 1 January 2021, there were 100,000 inventories and on 31 December 2021 there were inventories valued 80,000 unsold.

Required:

1. Prepare the Income Statement for Enterprise Print for the period ended 31 December 2021

(30 Marks)

2. Prepare the Statement of financial position for the period ended 31 December 2021

(30 marks)