Limited Companies Workshop Question

The trial balance of Gregory Ltd as at 31 December 2010 is as follows:

	MVR	MVR
Share Capital		100,000
Unappropriated profits brought forward from last year		34,280
Freehold premises at cost	65,000
Machinery at cost	55,000
Provision for depreciation on machinery account as at 31 December 2009		15,800
Purchases	201,698
Sales		316,810
General expenses	32,168
Wages and salaries	54,207
Rent	4,300
Lighting expenses	1,549
Bad debts	748
Provision for doubtful debts as at 31 December 2009		861
Receivables	21,784
Payables		17,493
Inventory as at 31 December 2009	25,689
Cash at bank	23,101
	485,244	485,244

The following additional information is available:

• The authorised and issued share capital is divided into 100,000 shares of MVR1 each
• Inventory as at 31 December 2010 was MVR29,142
• Wages and salaries due at 31 December 2010 amounted to MVR581
• Rent paid in advance at 31 December 2010 amounted to MVR300
• A dividend of MVR10,000 is declared for 2010
• The provision for doubtful debts is to be increased to MVR938
• A depreciation charge is to be made on machinery at the rate of 10% per annum at cost. No depreciation is to be charged on the freehold premises

Required:

Draw up an income statement and a statement of changes in equity for the year ended 31 December 2010, and a statement of financial position as at that date.