Having completed the work for Palmer, you then access a summary of the accounting information for client Hove plc for the year to 31st July 2014 which is in the form of a trial balance as follows:

Hove plc Dr Cr

Trial Balance as at $ $

31 July 2014

Share Capital - Authorised and Issued $1 Ordinary shares 7,500,000

Opening Stock (Inventory) 250,000

6% Debenture Loan (Repayable in full in 3 years time) 2,500,000

Sales 20,000,000

Trade Debtors (Trade receivables) 1,125,000

Profit and Loss account balance at start of year 2,665,000

Trade Creditors (Trade Payables) 750,000

Deferred Taxation (long term liability) 1,525,000

Debenture Loan Interest (half year) 75,000

Business property taxes (rates) [operating cost] 6,000,000

Purchases 3,250,000

Vehicles and Equipment at Cost 1,750,000

Freehold land at Valuation 15,000,000

Freehold buildings at Cost 8,330,000

Cash in hand and bank 100,000 1,225,000

Vehicle running costs 225,000

Directors remuneration 1,513,275

Wages and Salaries 750,000

Intangible fixed assets 1,250,000

Administrative expenses 2,000,000

Bad debts written off during yea 274,500

Provision for depreciation balances at start of year:

Vehicles and Equipment 250,000

Freehold Buildings 163,275

Heat, light and cleaning 1,000,000

Taxation paid during year 500,000

Long-term provisions 5,629,500

Corporation tax balance at start of year 1,185,000

43,392,775 43,392,775

6 The following additional information has also been obtained from the company in respect of final account year-end adjustments which are to be made:

Notes for Hove plc $

1 Closing stock (inventory) has been valued at 300,000

2 The provision for bad debts as at the year end is

to be 2% of closing trade debtors ?

3 The following expenses were prepaid at the end of the year:

Business property taxes (rates) 600,000

Vehicle running costs 45,000

4 The following expenses were to be accrued at the end of the year:

Heat, light and cleaning 300,000

Administrative expenses 600,000

Debenture loan interest (half year) ?

5 Provision for annual depreciation is to be as follows:

Freehold buildings 2% of Cost ?

Vehicles and Equipment 25% of book value ?

6 The Corporation Tax charge for the year has been agreed as 813,625

You are required to prepare, for Hove plc:

An Income Statement (Profit and Loss account) for the year to 31st July 2014 in a form suitable for internal use. (Note that your profit after tax figure should be $3,254,500)

A Position Statement (Balance Sheet) as at 31st July 2014 in a form suitable for internal use. (Note that your share capital and reserves figure should be $13,419,500)